It was a year of sharply contrasting halves for NSW meat processor Northern Cooperative Meat Co, which announced an $8.2 million profit after tax for the 2020 financial year to shareholders at its annual general meeting in Casino recently.
Co‐op chairman John Seccombe said while the result for the year ended June 30 was good (up from a profit of $3.2m the year before), global uncertainty had the board squarely focused on the year ahead.
“We are pleased the business has improved on last year however the second half (January to June) has given us a taste of things to come,” Mr Seccombe said.
The business was hit last year by the combined forces of COVID-19, the seasonal turnaround limiting livestock supply alter in the reporting period, and a dramatic decline in demand and value of hides. The loss of the plant’s export access to China in May, over documentation issues (along with three other large Australian processors), also impacted operations to some extent. An estimated 5-10pcv of Casino’s kill carried out for service kill customers, mostly Wagyu, shifted operations elsewhere, as a result of the China access issue.
“The year was characterised by the most severe turnaround ever experienced,” Mr Seccombe told shareholders.
The first half saw good trading conditions as the extended dry accelerated livestock turnoff and at the same time, global meat prices were strong, meaning above average returns to processors.
While conditions were favourable for processors at the time, the Co‐operative’s livestock member base was suffering due to drought, and we really needed a decent summer of rain” Mr Seccombe said.
Those wishes came true with good falls over many drought-stricken cattle supply regions. Plant throughput consequently fell sharply, back 25-30pc as a result of herd rebuilding. Processing shift numbers declined to 3-4 per week on the latter stages of the year as numbers declined.
“While the co‐operative was prepared for lower livestock numbers following rain, the global pandemic compounded the problem,” he said.
“The start of drought-breaking rains made sourcing slaughter cattle difficult, but when countries closed borders around the world in response to the pandemic then we were really in unchartered waters,” Mr Seccombe said.
The single biggest impact financially on the business last year was the halt to current and future hide sales, which happened virtually overnight, shareholders were told.
“With retailers shut around the globe due to COVID, demand for leather goods collapsed, and we (the Casino Hide Tanners subsidiary) was left with hides in the supply chain with no certainty of payment,” Mr Seccombe said.
Fortunately customers honoured the commitments and product has again started to move, albeit at lower price levels, he said.
During this period, NCMC qualified for Government COVID Jobkeeper support, allowing the business to retain the core if its processing and hides staff.
With regards returns to cooperative members, NCMC announced and fully-franked rebate to shareholders, allocated on a per-animal supplied calculation. The total rebates amounted to almost $1 million last year.
“We acknowledge the importance of providing value for membership and are pleased to offer a financial return to members,” Mr Seccombe said. “In fact the Board is committed to a policy of providing up to 20pc of net profit after tax to members annually.”
He said he hoped this clear message encouraged members, new and old, to support the Co‐operative knowing they can earn additional income by supplying livestock to the plant.
Also during the annual meeting, the NCMC board recently approved investment in expanding the plant’s retail-ready production capacity.
During the meeting, three members nominated for the two vacant director positions. Incumbent directors Neil Summerville and Ron Chittick stood for re‐election along with Damien Dougherty. Mr Summerville was returned, with meat marketing and sales expert Damien Dougherty also joining the board. John Seccombe was returned as chairman.
Mr Seccombe thanked Ron Chittick on his contribution to the Board over the past twelve years and in particular acknowledged his work various committees including Risk, Audit and workplace safety.
New look logo
Also during the annual meeting, the Northern Co‐operative Meat Co released its new corporate brand, developed over the past five months in collaboration with an ad agency
Chairman John Seccombe said there were a number of reasons why it was decided to change the corporate identity from NCMC to the new identity, the Casino Food Co-op.
“NCMC did not form a succinct or cohesive sounding word and was very hard to say; we wanted to tap into the Co‐operative’s heritage and location, and step into the future with a new name that better defines who we are,” he said.
“We believed the time was right, with the resurgence of co‐operatives.
The navy and bone colour palate was chosen for its more professional look, providing a “sense of warmth, earthiness, trust, loyal, confidence & stability.
Chief executive Simon Stahl said the objective had been to create a new corporate brand that recognised:
- ‘Casino’ as the company’s origin, its history, its story and local community
- ‘Food’, given the changing tone of voice in a changing world
- ‘Co‐op’ as the business’s unique proposition which will resonate with farmers & community
- ‘Since 1933’ as being very symbolic to our co‐operatives history”
The new logo is for corporate use only, and will not impact on the plant’s brand programs like the Richmond Valley range. The business entities, structure and registered name, Northern Co‐operative Meat Company Ltd, remain unchanged.
Over the coming month, branding will transition from NCMC to the new “Casino Food Co‐op” and appear on signage, social media platforms, promotional material and website as well as in correspondence.