Milmeq sale expected to expand service offering

Milmeq designed beef processing system
Milmeq designed beef processing system.

Privately-held New Zealand engineering company Milmeq Limited, a designer and manufacturer of meat processing equipment, will be split and sold in the coming months, but it doesn’t mean the end of the brand. An agreement was signed at the end of last week for the sale of Milmeq’s chilling and freezing capability to New Zealand-listed company Mercer Group Limited, effective from 1 March 2019.

Chairman Ralph Marshall describes the sale as a good move for staff, customers and suppliers.

“Being purchased by a publicly-listed company, with a range of complementary products, positions Milmeq equipment well for future growth. We have been nimble over the years, always innovating to meet market needs, but we anticipate this innovation will further accelerate under the new owners.”

Mercer Group supplies equipment to the food processing sectors under its two operating companies; Mercer Stainless, which works in stainless steel fabrication for the dairy and medical industries, and H&C, which provides automated handling systems to the dairy and meat processing industries. Milmeq will form part of the Haden & Custance (H&C) business.

“Adding Milmeq chilling and freezing products and experienced staff to Mercer Group is expected to provide a number of synergies and facilitate further expansion in the global market,” Marshall says.

He describes Mercer Group as a like-minded company, with similar values and a focus on innovation and customer service.

“For our customers, we expect this to result in continued improvements to products and services, to meet their rapidly evolving needs,” he says.

The sale will see Mercer Group acquire Milmeq’s range of chilling and freezing systems, including tunnels, plate freezers and other products sold under licence, which it will continue to sell under the Milmeq brand.

A conditional agreement is also in place for the sale of the company’s meat processing system design and engineering capability. This capability will be transferred to Australian project delivery company Wiley & Co. Pty Limited, as part of a strategy to expand their operations into New Zealand. This transfer is expected to take effect in January 2019.

Wiley expands its Asia-Pacific footprint

Tom Wiley, managing director of Wiley & Co
Tom Wiley, managing director of Wiley & Co.

A number of Milmeq existing team members will be integrated into Wiley’s New Zealand operations which extends their existing capabilities and ensures continuity of service to Milmeq’s existing clients.

The two companies have worked together for many years on meat processing plants around the region and when the opportunity arose to bring the two together Wiley jumped at it, explains company managing director Tom Wiley.

“It was an easy choice for us to integrate the Milmeq team with Wiley,” he says. “We have a longstanding partnership with the company, having worked with them on numerous meat projects over the years. For me, the reason this really was the obvious choice is the alignment of Milmeq’s values and culture with our own. As our teams have worked together this has shone through and is so important. We can’t wait to bring their team’s experience in beef, lamb, venison and goats to Wiley.”

Excellent outcomes for existing Milmeq customers

Ralph Marshall says the two transactions were expected to provide excellent outcomes for existing Milmeq customers.

“These sales will ensure continuity of service to our customers. And our customers will further benefit from by having access to the broader capabilities of the purchasing organisations,” he said.

All existing project contracts will be completed by Milmeq Limited and new contracts will be transitioned either to Mercer Group or Wiley. Key Milmeq staff members are expected to transfer to the purchasing companies to help ensure a smooth transition for customers. However, there were also expected to be a number of redundancies, as remaining business operations were proposed to be wound up in the coming months.

Marshall acknowledges the change in ownership and direction meant the outcome was not ideal for those Milmeq staff members potentially facing redundancy.

“It is absolutely the low point of this transaction,” he says.

The Dunedin site, including its manufacturing workshop, did not fit into the growth strategy for either Mercer Group or Wiley.

Attempts to sell the manufacturing workshop as a standalone business had not been successful and, as a result, Milmeq Limited has today signalled its intention to close its Dunedin workshop over the coming months.

Marshall describes making the announcement for the potential closure as “unavoidable but incredibly difficult.

“We’ve been a family-owned business for more than 60 years, so our team are considered part of the Milmeq family. To be having to now tell these people they may no longer be a part of that – that makes this process bittersweet,” he says.

Consultation with affected staff would be undertaken throughout the coming week, with a final decision expected to be announced on Monday 17 December.

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