A new Te Aroha emerges from the ashes

Silver Fern Farms' Te Aroha exterior.Two years after Silver Fern Farms’ Te Aroha beef processing operation was destroyed by fire in December 2010, a state of the art facility opened in December and is up and running in its place.

Silver Fern Farms’ new $67m Te Aroha plant is a hot-boned beef processing operation designed for best practice processing of manufacturing cows, bulls, steers and heifers from farmer suppliers across the Waikato region.

It joins a network of 23 Silver Fern Farms processing facilities employing over 7,000 staff throughout the country. Te Aroha will employ up to 380 staff when operating at full capacity with two shifts in peak season with an annual capacity of 125,000 cattle.

At the plant’s official opening in December last year, Silver Fern Farms chief executive, Keith Cooper, said the new design reflected the company’s focus on plant economics and best practice processing and the investment was testament to the co-operative’s strong confidence in the sector.

The plant has been designed in consultation with internationally recognised experts in process layout and ergonomics. It is compliant with New Zealand, EU, US Department of Agriculture (USDA), and Chinese hygiene requirements and also to halal standards for the Middle East, Malaysia and Indonesia.

Te Aroha incorporates the latest meat processing technologies; including sophisticated traceability and yield measurement systems.

Te Aroha, December 2013: Computerised Marel Streamline technology monitors meat as it passes through slaughter, grading and boning processes. The plant is configured with a custom-designed two-level Milmeq slaughterboard. Extensive use is made of RFID tags, with scanning stations at slaughter, grading and boning stages, monitored through the new Marel Streamline computerised deboning and trimming system. The process has been designed for complete traceability and to enable Silver Fern Farms to closely monitor key production indicators.

Rapid feedback

This system has the capability to deliver rapid feedback to plant staff on how closely they are meeting customer requirements for particular cuts. This fits with Silver Fern Farms’ plate-to-pasture strategy where consumer requirements are driving process improvements in order for the company to extract higher value returns from products.

This data collection is underpinned by the Primary Growth Partnership FarmIQ joint venture programme – an investment of $151 million by Silver Fern Farms, Landcorp Farming, Tru-Test Group and the Ministry of Primary Industries.

Over the seven years of the programme the aim is to integrate the red meat value chain to maximise returns to farmer partners.

For farmers, information collected at the Te Aroha plant on meat yield and quality can be used to inform farm management decisions as they look for avenues to lift farm system performance. This information can also be married with information from the insights FarmIQ will bring from consumers so farmers can produce to target higher-value returns from specific consumers.

Trimming to specification

Boning room technology at SFF Te Aroha.Following break-down and deboning, the primal cuts are distributed to work stations on the trimming line, based on operator availability. They are then trimmed according to individual specifications and all cuts are fully traceable. The automated conveyor system will enable Silver Fern Farms to closely monitor and control critical key production indicators in real time throughout the complete processing cycle. These include yield, throughput, cutting performance, giveaway and loss of sales. These are automatically registered and monitored for the entire line as well as for the individual operator, using Innova intelligent production control software.

Provision has been made for future installation of technologies including robotic bagging.

Sustainability top-of-mind

Eco-efficiency and sustainability were top-of-mind considerations. As a result, the new plant uses significantly less electricity and water per head and discharges less effluent per animal processed, setting new benchmarks in line with global customer requirements.

Keith Cooper says the rebuild gives the company an opportunity to review the environmental footprint of the operation. “Our focus is improving environmental efficiency while reducing costs through better use of resources and reduction of waste.”

The plant has also been orientated to ensure noisy areas and truck movements are at the centre or the rear of the plant, away from neighbours. Every effort has been made to reduce noise coming from the plant, even to the point that refrigeration equipment, undamaged by the fire, was relocated.

Health and safety focus

Te Aroha, December 2013: Trim stations are individually tailored for each workeer's reach to meat, height and access to work stations.Health and safety was another major focus for the company when developing the specifications for the new facility. Process areas have been designed to minimise workstation hazards. A suite of solutions to minimise lifting, turning and carrying were factored into the design. The boning room has European-designed workstations intended to maximize productivity by minimising operator fatigue and discomfort. At trim stations adjustable work heights, reach to meat and easy access to work positions make for a safer and more comfortable work environment for staff.

Separate viewing areas let people observe the slaughter and boning processes without interfering with workers on the floor. The plant layout also factors in separation between pedestrian and heavy vehicle movement areas to provide a safer environment for people.

Throughout the rebuilding process, Silver Fern Farms endeavoured to provide alternative options for staff whose livelihoods were affected by the fire, to the extent of making positions available at other company plants in the North Island and providing accommodation supplements in the early stages. The company’s significant capital spend also has provided positive spin-offs to the local economy as a result of the number of contractors throughout the region engaged during the course of construction.

Cooper says the co-operative’s loyal farmer-suppliers in the area were particularly supportive of the company through the re-build.

“We are grateful to those suppliers who have stood by us and persevered while we got the new plant up and running – we know the disruption has been an inconvenience for many. But we are enthusiastic about the service levels and advantages we can now offer them as a result of our investment.”

Pictured at the Te Aroha opening are (left to right): local MP Scott Simpson; John Key; Eoin Garden chairman Silver Fern Farms; Keith Cooper, chief executive Silver Fern Farms; Kevin Winders, chief operating officer Silver Fern Farms.

Pictured at the Te Aroha opening are (left to right): local MP Scott Simpson; John Key; Eoin Garden chairman Silver Fern Farms; Keith Cooper, chief executive Silver Fern Farms; Kevin Winders, chief operating officer Silver Fern Farms.

 

This article has appeared in Food NZ magazine (February/March 2013) and is reproduced here with permission.

Silver Fern Farms donates $500,000 to Te Aroha Events Centre

Pictured left to right are: Eoin Garden, chairman, Silver Fern Farms;
Keith Cooper, chief executive, Silver Fern Farms; Peter Jager, chairman Te Aroha Events Centre Charitable Trust; and Prime Minister John Key.

At the official opening of Silver Fern Farms’ new world-class Te Aroha beef processing facility last week, the company also announced its intention to make a sizeable donation to a community initiative of major significance to Te Aroha.

Silver Fern Farms chief executive, Keith Cooper, revealed that the co-operative and its local farmer-suppliers had jointly contributed to a dedicated Te Aroha Community Fund over the period the plant had been out of operation.

Silver Fern Farms’ Te Aroha beef plant was destroyed by fire in December 2010, devastating the company’s local workforce and impacting heavily on the Te Aroha community. Fully aware of the uncertainty the community faced, the company signalled its intent early-on to rebuild a new state-of-the-art flagship processing operation on the same site.

In the interim period, the company had endeavoured to provide alternative options for staff whose livelihoods were affected by the fire, to the extent of making positions available at neighbouring plants, providing accommodation supplements in the early stages and donating meat for food parcels for those in need.

“We were heartened by the way the Te Aroha community rallied so bravely around affected Silver Fern Farms employees. From the outset, we were determined to make a meaningful contribution to the township above and beyond our commitment to rebuild – one that would acknowledge the support of the Te Aroha community into the future. We reached out to our loyal suppliers in the area and their response to the appeal was overwhelming” said Cooper.

Over the last two years the company had been working in partnership with the Matamata-Piako District Council to identify where the fund might ultimately be best deployed. This culminated in the co-operative proudly announcing base funding of $500,000 for the establishment of the Silver Fern Farms Te Aroha Events Centre in association with the Te Aroha Events Centre Charitable Trust.  The Events Centre has been a long-hoped for facility in the Te Aroha area to support community health and wellbeing, and Silver Fern Farms’ donation will provide a major funding boost to progress the initiative.

Silver Fern Farms’ Te Aroha plant will be fully commissioned ahead of the new season and will employ up to 380 staff when operating at full capacity, which is welcome news for the township.

“The whole community has been behind the project every step of the way” said Te Aroha plant manager, Lance Warmington. “The company’s commitment to rebuilding Te Aroha is a big deal here – it means future security for hundreds of families in the area.”

Silver Fern Farms’ Te Aroha opening

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Pictured at the Te Aroha opening are (left to right): local MP Scott Simpson; John Key; Eoin Garden chairman Silver Fern Farms; Keith Cooper, chief executive Silver Fern Farms; Kevin Winders, chief operating officer Silver Fern Farms.

Prime Minister opens new SFF Te Aroha plant

Pictured at the Te Aroha opening are (left to right): local MP Scott Simpson; John Key; Eoin Garden chairman Silver Fern Farms; Keith Cooper, chief executive Silver Fern Farms; Kevin Winders, chief operating officer Silver Fern Farms.

Prime Minister the Rt Hon John Key opened Silver Fern Farms’ brand new flagship processing plant at Te Aroha this afternoon.

The new plant, the first to be built by the farmer co-operative under its current name Silver Fern Farms, replaces the beef processing plant seriously damaged by fire on the site in December 2010.

The ceremony was attended by representatives of central and local government, local iwi, and members of the Te Aroha community in addition to Silver Fern Farms’ board of directors, leadership team, plant management and contractors involved in the project.

Silver Fern Farms’ chairman, Eoin Garden, and chief executive, Keith Cooper, welcomed a large gathering of all those associated with the rebuild including contractors, local government representatives, local iwi and members of the Te Aroha community.

At the opening, Garden said the investment of $67m to commission the state-of-the-art facility was testament to the co-operative’s strong confidence in the sector and he indicated the clear alignment of this investment with the Government’s business growth agenda.

Keith Cooper spoke of the importance this plant has, not only to farmer-suppliers in the surrounding rural areas, but also to the local Te Aroha community. The fact the plant will be fully operational ahead of the new season is welcome news for the township, with the prospect it will employ up to 380 staff when operating at full capacity.

“The whole community has been behind the project every step of the way” said Te Aroha plant manager, Lance Warmington. “The company’s commitment to rebuilding Te Aroha is a big deal here – it means future security for hundreds of families in the area.”

Positive spin-offs for local community

Throughout the rebuilding process, Silver Fern Farms endeavoured to provide alternative options for staff whose livelihoods were affected by the fire, to the extent of making positions available at neighbouring plants and providing accommodation supplements in the early stages. In tough times, the company’s significant capital spend also has provided positive spin-offs to the local economy as a result of the number of contractors throughout the region engaged during the course of construction.

“Our whole team are extremely proud of the facility we’ve designed and created,” Warmington added.

“The company culture and the Silver Fern Farms brand and all it stands for are really embedded in the overall look and feel of the new plant, and our people are responding really positively to the new working environment.”

Eco-efficiency and sustainability “top of mind”

Developed in consultation with internationally recognised experts in process layout and ergonomics, the plant incorporates the latest meat processing technologies, including sophisticated traceability and yield collection systems. Cooper said the new design reflects the company’s focus on plant economics and best practice processing, and that eco-efficiency and sustainability were top of mind considerations.

“The rebuild gave us the opportunity to review the environmental footprint of our operation. Our focus is improving environmental efficiency while reducing costs through better use of resources and reduction of waste.” he said . “As a result, the plant sets a new industry benchmark in line with global customer requirements – it uses significantly less electricity and water per head and discharges less effluent per head processed.”

In his address, Cooper also thanked the co-operative’s loyal farmer-suppliers in the area for supporting the company through the re-build.

“We are grateful to those suppliers who have stood by us and persevered while we got the new plant up and running – we know the disruption has been an inconvenience for many. But we are enthusiastic about the service levels and advantages we can now offer them as a result of our investment.”

Silver Fern Farms intends to open the plant to farmer-suppliers and the local community in a series of open days in February 2013.

 

Season just ended could produce messy results, says Barber

The season just ended could produce messy results, according to meat industry commentator Allan Barber.

The two largest processors and exporters, Silver Fern Farms and Alliance, have captured the headlines in the last couple of weeks.

Hot on the heels of its announced intention to close its sheepmeat chain at Mataura, Alliance has come out with an offer to suppliers of $20 in November per lamb contracted before the end of October.

From the other cooperative camp Keith Cooper, chief executive of Silver Fern Farms, last week sent an email out to suppliers which highlighted the disappointing financial result for the year ended 30 September because of the exchange rate and declining sheepmeat values in January and February not being reflected in procurement prices.

The final results will be declared in about two months when the market will be able to see just how disappointing the performance of the two companies actually was. Rumours of multi-million dollar losses have been prevalent, but rumour is just what they are until we see the actual figures. There is no doubt the problem has been almost entirely with sheepmeat in spite of the exchange rate, because exporters have been far more successful at reining in beef procurement costs.

It doesn’t take an Einstein to work out that the shortage of lambs for Mataura and the procurement competition are just two aspects of the same problem. The lowest national lamb kill for 51 years at 18.6 million, 15 percent down on the five year average will have made it very difficult for any company to get sufficient capacity utilisation to come close to making a profit. With Alliance’s largest sheep plant outside Invercargill, Mataura just over 50 km up the road was always under threat from declining volumes.

Blue Sky Meats, which balances in March, presaged the 2011/12 season’s problems in its declared annual result – a pre-tax loss of $604,000 and no dividend paid. The company termed this the most disappointing result in its history and drew attention to the excessive prices paid for stock through the turn of the year, both because of the high dollar and the drought in Southland.

It will be interesting to see how successful Alliance will be in securing committed lambs from suppliers stimulated by the $20 cash advance. Keith Cooper’s reaction was to say Silver Fern Farms had tried it six years ago with no success because some suppliers were affronted by the implication they were short of cash and didn’t want to close out their slaughter options. He prefers to rely on the company’s suite of supply plans rather than to repeat the cash in advance offer.

In his email to suppliers, Cooper sounds quite bullish about the new season’s prospects with a ‘fully configured operating platform’ and some exciting new marketing initiatives, even being bold enough to state that realistic livestock values are being established. If that is the case, it will either be because there’s enough livestock around to satisfy all processors or he is confident Silver Fern Farm’s overhead structure is competitive enough to guarantee filling their requirements.

Either way that is a big call in spite of the gains Silver Fern Farms has made in recent years, notably the closure of the Belfast sheep chain, improvements to its Finegand sheep processing and the rebuild of Te Aroha in the heart of the dairy farming Waikato/Bay of Plenty region. There are expected to be another 1.5 million lambs, but not enough to change processing dynamics much, while the market is another factor.

The meat industry is unique in that it has to compete at both ends of its supply chain. While livestock procurement has the most obvious impact on company profitability, demand from the market is also critical. Last season’s disappointments and losses have been as much about carrying too much inventory which the market couldn’t digest as the cost of the livestock to produce it.

When companies fail to manage both ends of the chain properly, things get messy. Just how messy they were last season will become clearer at the beginning of December when Alliance and Silver Fern Farms publish their results.