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$120m upgrade arms Kilcoy plant for global beef opportunity + VIDEO

by Jon Condon, 15 June 2018

A $120 MILLION plant upgrade and expansion which has touched most areas of the facility has armed Queensland grainfed beef processor Kilcoy Pastoral Co for the future.

A suite of major projects undertaken at the southeast Queensland site over the past two years have delivered potential for greater throughput, greater efficiency, and overall performance advances through the business.

In what’s arguably the biggest investment in processing infrastructure in the beef industry since the establishment of AA Co’s $100m Livingstone Beef plant near Darwin in 2015, the Kilcoy project represents a major vote of confidence in the Australian beef industry by the business’s owners, Hosen Capital.

China’s Hosen bought the Kilcoy business from Singapore’s Harmony Group in December 2013.

Since making its move on Kilcoy four-and-a-half years ago, Hosen has invested heavily in the business – re-injecting profits into capital works and introducing new capital. Kilcoy today is a modern, highly efficient and large-scale processing business. It demonstrates deep commitment to creating a value-based grainfed beef business that is profitable, and delivers consistently to customers around the world.

As outlined in this earlier article, Hosen, through its newly established entity, Kilcoy Global Foods, is building a vertically-integrated food solutions business which goes a long way past the fundamental steps of processing cattle and exporting beef in a box.

The acquisition of Ruprecht Company a processing and value-adding business in the US, and Weidao Food Company in China, has greatly diversified Kilcoy’s business into value add, portion-control and distribution in North America and North Asia.

As Beef Central outlined in this earlier article, Kilcoy is also launching a new suite of high quality beef brands, covering Wagyu and Angus longfed, and conventional 100-day grainfed programs (see separate item published earlier).

Dean Goode. Kilcoy Global Foods CEO

Kilcoy Global Foods chief executive, Dean Goode, told Beef Central during a recent interview and site visit that the impact from Hosen’s capital injection had been seen right across the processing facility – from the slaughter floor to the boning room, chilling and freezing infrastructure, and the rendering facility.

Each of the components of the plant upgrade had been carefully staged, to deliver incremental growth, he said. All are designed to contribute to an assured, reliable, high-quality supply of branded beef to the world market.

Currently Kilcoy employs around 1200 staff, up from 750 just three years ago, making it one of the largest employers in the local region, and injecting around $1.5 million each week in wages into the local economy. More staff will be added as the plant’s expansion takes effect.

Capacity grows

While the primary objective in the development is quality and consistency, Kilcoy is also undergoing significant killing capacity expansion.

Before the current upgrade work started three years ago, daily output was 750-800 head/day. Currently the site operates a single daily shift, working seven days a week, processing 1200 head/day. Previously, the plant operated two-boning shifts daily and a single killfloor shift, but can now achieve greater volume on a single shift.

The upgraded facility is designed for 1700/day capacity under its current configuration, but will operate for the time being at 1500-1550, Beef Central was told.

“But while growth in numbers is important, the primary objective is quality over quantity,” Mr Goode said.

Killfloor, boning room expand

In an extraordinary logistical feat around Easter 2017, the plant’s original slaughter floor building was gutted, expanded and re-fitted, taking killing capacity from 80 head an hour to 130 head an hour.

The floor is also designed to introduce an individual carcase traceability system, if ever required.

At the same time, five new state-of-the-art carcase chillers were built, as well as a massive chilled and frozen cold carton storage facility. A new dry goods storage was constructed at much the same time.

One of the unique features of the re-development is a cutting-edge loading and despatch area, where a fleet of 18 Autonomous Guided Vehicles (AGVs), serviced by robotic-arm carton stackers, build and deliver pallet consignments to eight load-out docks (see short video above). The sortation and load-out project, outlined in detail in this earlier story, is described by contractors, Scott Automation as a world-first in meat processing.

That project, alone, has pulled an estimated 35-40 personnel out of the load-out area, to be redeployed elsewhere in the plant as output has grown. Total cost of the sortation and load-out project, including buildings and refrigeration, sortation systems, conveyors, robots and AGVs totalled around $24 million.

One of the challenges with the technology was linking communication for example between the different parts of the sortation and load-out project and the robotic arms.

Other areas where considerable money has been spent at the plant in the past couple of years include the offal area, with enhanced animal health reporting, and a major $8 million upgrade of rendering facilities, designed to keep pace with plant expansion and environmental management expectations.

Kilcoy’s new boning room will handle up to 1700 head per day in a single shift

The last piece of the upgrade puzzle, completed only in October, was a new boning room. To give some indication of the scale and complexity of the room, it includes more than 350 electric motors and gearboxes alone – every one supported by sensors and monitors.

Contractors involved in the construction work on the site included Spaceframe for the structural building work, G&B for the stainless steel requirements as well as the overheads and conveyors, and the lower parts including conveyors and materials handling systems fabricated and installed by Pro-Ali, out of Gosford, NSW. The entire project was self-managed by Kilcoy’s staff.

One of the startling features of the new boning room is its sheer spaciousness. Many Australian beef boning rooms have been stretched to their operational limits over time as plants have grown, often meaning cramped space and tight working conditions. Kilcoy’s new boning room, in contrast, is a cavernous work area, and in fact has an entire additional boning-line ‘mapped out’ on part of the floor which is empty – designed for future growth opportunities, as  they arise.

Total boxed beef output through the plant currently is around 2500 tonnes per week. Around 20-25 percent of that finds its way into the China market, through the company’s own Weidao business – either valued-added or wholesaled. Another 10pc is channelled into Kilcoy’s US value-adding and portioning business. But despite the company’s Chinese ownership, there is no particular ‘loyalty’ to the China export market, with all marketing decisions made exclusively on the best possible return for each item on the global stage.

Given the capacity expansion taking place through the plant, Beef Central asked how Kilcoy planned to secure additional supply of grainfed slaughter cattle.

The plant expansion would not necessarily mean working with a larger number of NFAS-certified feedlots, but rather was more about growing capacity from existing suppliers, we were told.

Some lotfeeders had started this process two years ago, well aware that the plant expansion was coming, and adding additional pens and infrastructure to keep pace with demand.

Kilcoy has a strong reputation in the industry for setting the pace on forward pricing for grainfed cattle in Queensland and NSW, with cattle regularly drawn from as far south as the NSW Riverina and north to Central Queensland.

  • Kilcoy hosted a celebrity dinner at Beef 2018 last month, featuring Japan’s famous Iron Chef Hirai, preparing the company’s new F1-F2 Wagyu and longfed Angus beef brands, discussed in this earlier article.


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