MIA Focus: ANZCO delivering on investments

ANZCO’s new chief executive Peter Conley has plenty on his agenda for the coming year. This includes ensuring New Zealand’s $1.45 billion turnover company – one of the country’s largest meat processing and exporting companies and fifth largest food exporter – continues to deliver on its investments, enhancing trade access, emphasising adding value and developing chilled meat opportunities with China.

Conley took up his position on 1 April, when he also became the Meat Industry Association’s newest council member, following the retirement of his predecessor Mark Clarkson.

The Victoria University graduate is well versed in the New Zealand meat industry and ANZCO. After completing his B.Com – majoring in commercial law and marketing and successfully undertaken while working at exporting specialist, Crown Marketing – Conley spent much of his early working career in Wellington. He first joined Crown in 1990, which was acquired by ANZCO in 1997, then moved to the US in 2005 where he managed the company’s North American operation for five years, from its base in Chicago. While there, he also graduated from the Advanced Executive Program of the Kellogg School of Management at Chicago’s North-Western University.

He returned to New Zealand to become chief executive of ANZCO’s Harvest Division which incorporates the company’s agriculture & livestock, processing, and sales and marketing functions. In that capacity, he worked very closely with Clarkson, which made for a smooth transition.

Results published at the end of March by the company showed a pre-tax profit of $17 million for the financial year ending 31 December 2016, a 21 percent lift on the previous year. Turnover, however, was down by about six percent to $1.45 billion, a factor of foreign currency exchange movements. Aside from that, performance across the beef and lamb processing business and value-add businesses was positive.

Conley says the solid business result was pleasing for the team, especially given the ongoing challenges of the wider red meat industry. They attribute this to working closely with the company’s Japan-based majority shareholders. For chairman Sir Graeme Harrison, growth in the Japanese market, including grain-fed beef and manufactured food products, were also key areas of gain.

Looking ahead, Conley says it’s very much business as usual for the company.

“ANZCO’s business direction has not changed,” he says. Key for him will be making sure the company continues to deliver in the areas in which it has invested.

The Harvest Division is core to the plan: “We need to ensure meat processing is as efficient as possible and market access opportunities are maximised.”

In 2016, $23 million was invested in boosting processing capability at its Rangitikei and Canterbury sites, along with a growing commitment to value-add business activities, including a significant increase in Angel Bay manufacturing capacity at ANZCO’s Green Island processing plant.

Meanwhile, the Food and Solutions Division is driving sales growth.

Creating new added-value products from meat is at the heart of the seven-year $58 million ANZCO-led Primary Growth Partnership (PGP) with the Ministry for Primary Industries aimed at generating more value from the red meat carcase. Work started in 2012 in three strands: new food product development; ingredients; and healthcare.

The PGP draws on new product development work within the ANZCO Innovation Centre, based at Lincoln University. A range of new slow-cooked ribs and lamb shanks for foodservice and retail was launched last year under the ‘Nourish’ brand.

ANZCO invested in new plant to support FoodPlus and the ingredients work on a range of stock and meat extracts for use in new markets, such as soup and noodle flavouring.

The company’s work in the healthcare area saw it buy 100 percent of a previous joint venture with Melbourne-based blood and serum specialists Bovogen.

ANZCO is also an enthusiastic and active participant in another red meat sector PGP, the Red Meat Profit Partnership, which is aimed at lifting sector profitability.

Recent news that two ANZCO chilled processing plants – ANZCO Canterbury and ANZCO Kokiri – have been selected for approval in the six-month trial for export of chilled meat to China is a “great step”, says Conley. The market will have a particular focus for the future.

“This gives us the opportunity for both beef and lamb, especially for our South Island assets, including the Five Star Beef feedlot outside Ashburton,” says Conley.

Conley is excited about continuing to drive the investments and opportunities, and is confident beef and lamb pricing will remain buoyant for the rest of the year.

“Despite the current global uncertainties, the markets are looking pretty good,” he says.

The biggest challenge for industry will be to keep opening doors in export markets.

“Given how important exports are to our sector, with over 80 percent of beef and more than 90 percent of our sheepmeat exported, the ability to compete on a level playing field is critical,” he believes.

Conley would love to see New Zealand get improved access for beef into Japan, for example. “We need to continually strive for the best possible agreements.”

With 3,000 staff, seven offshore offices, eight processing plants, three food manufacturing sites and an innovation centre, as well as a focus on extending opportunities for value-added meat-based products, he will have plenty to keep himself busy.

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