Diversified flour milling, ethanol and stockfeed business, Manildra Group, has purchased the GM Scott lamb and beef abattoir at Cootamundra in southern NSW, in a move designed to further diversify Manildra’s exposure in the agribusiness sector.

The highly-regarded Riverina plant is due to change hands on June 30, ending 30-plus years of ownership by the Noble family.

Significantly, the sale to Australian-owned Manildra came despite rival bids for the business from two Chinese entities. At least two other large Australian entities, including Thomas Foods International and a group of Victorian processors, are understood to have considered, or placed bids. No price was disclosed.

Manildra currently employs about 800 staff in various divisions, and the GM Scott purchase will take that tally beyond 1000. Through its stockfeeds and by-products connections, Manildra has run a feeder cattle business for some time, and started its investment in the meat sector last year through a joint venture in a retail-ready boning room operated as Argyle Prestige Meats.

Manildra is owned by Dick Honan, who features in the latest BRW Rich List published this morning.

The GM Scott beef and sheep abattoir in Cootamundra was placed on the market last year, following the December 2012 passing of patriarch, Barry Noble. With family members pursuing other professional interests, a decision was made to put the business on the market.

Fortuitously, as it turned out, GM Scott had invested about $7 million in a major plant upgrade through a new processing floor a year ago, with a view to upgrading from tier-one to tier-two export status, opening up premium export markets like Japan, Korea and the US. The upgrade was started well in advance of any decision to sell the plant.

Currently the abattoir processes about 3500 lamb and 100 cattle a day, but Manildra plans to lift the beef kill immediately to 150-200 a day, mostly company-owned cattle at this stage, with future expansion in lamb, also.

GM Scott has a service kill contract with Woolworths, processing and boning 1400 lamb a day, as well as a service kill for several other clients, and export under the Noble Farm label. Beef goes mostly into domestic wholesale use, with export starting in a few weeks, under tier-two operations. Livestock catchment for both lamb and beef is from Wagga to Griffith, Forbes, Goulburn up to Cooma.

Respected chief executive, Len Jones, who worked closely with Barry Noble for many years, will continue on under Manildra ownership.

“It’s a new phase in the business’s 60-year history, and there are some very exciting opportunities ahead under Manildra’s management,” Mr Jones said.

Manildra director, Peter Millard, said his company’s strategy in investing in GM Scott was a ‘diversification play’ for the company, while remaining in the agribusiness space.

The company had been looking for an entry point into the meat industry for some time, Mr Millard said, although the company had run its own beef herd for some years, utilising the connection with Manildra Stockfeeds.

In its first investment in the red meat fabrication space, Manildra late last year entered into a 50:50 joint venture with Harden’s Lachie Graham, Argyle Prestige Meats, in a boning room and retail-ready packaging facility utilising space at the old Harden abattoir. Carcases were transferred from the GM Scott plant, supplying independents and various large and smaller supermarket retailers. This weekend, that business will move to a new state-of-the art boning room facility built at Nowra, which sits beside Manildra’s large milling facility.

The new plant will break, bone and slice mostly beef, but also some lamb, predominantly case-ready MAP and Darfresh packed ready for retail use.

“In establishing and growing the Argyle business, we were looking for a reliable tier-two service kill plant,” Mr Millard said.

“We’d been killing our own Manildra cattle at Cootamundra, taking them from the Shoalhaven (NSW south coast) area to the plant for processing. As we entered into the meat industry, we realised we were looking for an abattoir that would do a domestic and export service kill job for us, and that’s when Cootamundra came into calculations, as the relationship grew,” he said.

“We realised that to shore it up, we’d be better-off owning the plant, particularly as it had a relatively new slaughter floor that opened up opportunities in premium export markets.”

Mr Millard said the GM Scott beef chain would also ‘get a birthday’, and would support the existing boning room at Nowra, which will also go to tier-two export status.

“We think it is a good plant, which has had a substantial amount of investment over the past few years through Barry and the Noble family, which will enable us to look more closely at some export markets. Tier-two status was pivotal to the acquisition – as it was for others who were in the background, looking at it,” Mr Millard said.

“It’s a well-equipped, well-located lamb and beef plant in an excellent catchment area.”

• The GM Scott plant received a significant industry accolade two years ago, earning the 2012 Australian Meat Processors Corporation Innovation Award for its development work with a robotic lamb carcase cutter. Click here for further details.
• Earlier, the plant became one of the first processors in Australia to undertake a carbon mitigation project, receiving Federal Government funding support. A $200,000 project was implemented to help its two industrial refrigeration units run more efficiently, receiving $85,000 from the Australian Government’s Clean Technology Program. The program of investment, including upgrading the chiller complex and a recycled rainwater project, was part of the company’s broader sustainability commitment. Click here for further details.