Manildra Meat Company is to close the Cootamundra abattoir in southern NSW, blaming high livestock prices for making the processing plant “unviable” in the current environment.
The processing plant, acquired by the Manildra Group in mid-2014, is a beef and small livestock processing site employing 150 permanent and 70 casual employees.
Cootamundra boasts some of the country's most modern small stock processing facilities, with its operations upgraded to improve sheep and goat chain technology after the Manildra takeover.
The final day of processing will be next Friday, February 24, but the company says it is intent on processing again when market conditions improve.
A small team of employees will continue to be based at the plant to maintain the mothballed asset.
Manildra Meat Company general manager, Jason Graham, said the decision to shut the site was extremely difficult.
“We cannot continue to maintain a viable business in the current industry environment, particularly given the record high livestock prices and the inability of our customers to absorb these price increases,” he said.
The group’s main concern at present was the welfare and future employment opportunities of the 220 employees who would be affected by this decision.
The company was also reassuring its “valued suppliers and producers” that any outstanding financial obligations would be met.
“All employees will be paid their full entitlements as defined in their employment agreements,” Mr Graham said.
“We will be organising on-going on-site assistance for our employees in financial advice, job search skills, resume assistance and counselling services.
“We acknowledge that this decision will have a wider impact on the Cootamundra district and we will continue to assess the industry dynamics with the intention of processing again.”
Bought from the Noble family's GM Scott business in July 2014, the abattoir formed the basis for the Honan family’s Manildra Group move into meat processing and marketing domestically and overseas.
Following improvements on the processing and other infrastructure at the site after the takeover Cootamundra abattoir was processing more than 4200 sheep daily and at least 200 cattle a week.
High sheepmeat and beef prices have coincided with increased export market competition and sliding overseas beef values, plus a rising Australian dollar in the past two months.
The export pressures follow the loss of Manildra’s Woolworths lamb supply contract to the nearby Junee meatworks late last year, and reduced throughput on the beef chain earlier in 2016 as soaring cattle prices squeezed beef profit margins.
In early September, Manildra Meat Company director, Peter Millard, confirmed throughput at the Cootamundra plant had been scaled back “due to seasonal challenges including the availability and continuity of cattle supply”.
Manildra Group has grain milling, oilseed crushing, sugar refining, stockfeed and ethanol production operations in NSW, plus a meat meat packing plant at Nowra.
Manildra currently employs about 1300 people, primarily in regional NSW.
The story High livestock prices force Cootamundra abattoir closure first appeared on Farm Online.