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Processor insurance premiums surge, in wake of recent plant fires

by Jon Condon, 30 April 2018
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INSURANCE premiums for meat processors are reported to be on the rise, with some stakeholders suggesting two large catastrophic abattoir fires in Australia over the past 18 months are part of the reason.

Smoke billows from the TFI Murray Bridge meatworks fire in early January. Source: Twitter T-J

Thomas Foods International’s Murray Bridge beef and sheepmeat processing plant in South Australia suffered major damage due to a fire in early January.

The fire is understood to have started during maintenance, when welding sparks ignited foam-filled insulated panelling, commonly used in meat processing plants across Australia. The fire destroyed Murray Bridge’s boning room, constructed as part of a $30 million plant upgrade between 2013 and 2015.

Murray Bridge is still in the earliest stages of recovery, with some operations shifted to other beef and sheep plants including Lobethal, Tamworth and O’Connors at Packenham.

Twelve months earlier, the Swickers Pork processing facility near Kingaroy in Queensland’s South Burnett district also suffered a major fire. The largest pork processing facility in the Southern hemisphere, the fire engulfed the plant’s chillers, boning room and export distribution centre, putting 600 staff out of work.

In September, the Queensland Government provided support for a $100 million expansion and jobs drive as part of the Swickers recovery.

A minor fire also occurred at a southern Queensland beef plant earlier this year, causing a staff evacuation, but no significant damage.

Two large export beef processors have since confirmed to Beef Central that they face rises in insurance costs for fire protection, which they attributed in part to the recent fire events. Both confirmed that internally, major risk assessments had since been carried out within their businesses, particularly surrounding high-risk activities like maintenance, where open flames and sparks can occur.

Other processing industry sources this week suggested that recent rises in insurance premiums were more to do with global natural disasters impacting insurance companies, than isolated local fire events.

While TFI continues to get a service kill done at the G&K O’Connor Pakenham export beef plant, recent industry rumours suggesting that it might be engaged in takeover talks with O’Connors have been dismissed outright by TFI.

A TFI spokesman said the reconstruction process at Murray Bridge was now ‘a long way down the track,’ and in the interim, weekly smallstock numbers currently being processed were much the same as before the fire.

“We’re focused on getting Murray Bridge back up and running as soon as we possibly can,” the spokesman said.

 

 



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  • Ron Legge April 30, 2018

    Now they are done with the banks, how about a royal commission into the insurance industry !

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