Export meat marketer Sanger Australia is finishing the financial year with a growth spurt, merging with a rival exporter and establishing another business for its expanding organic trade.
Sydney-based Sanger, which sources beef, veal and lamb from meatworks Australia-wide for buyers in up to 70 countries and locally, has absorbed the operations of IBBCO Trading, also based in Sydney.
The 16-year-old IBBCO exports red meat, poultry and pork products to about 40 countries, principally in Asia, Africa and Eastern Europe, and is also a major player in the offal trade.
Just days after securing the IBBCO deal, Sanger signed off nine months of negotiations to team up with another meat business, Cleaver's, forming the Arcadian Organic and Natural Meat Company.
Cleaver's is already a prominent player in packaged organic red meat for domestic retailers, supplying house brand beef to Coles and Woolworths' Macro label in eastern Australia and more than 80 per cent of the nation's organic lamb.
It also supplies Franklins, IGA and other supermarkets with retail-ready packaged fresh meat lines and value-added products.
Sanger also sells to the domestic trade but about 70pc of its organic beef goes to nine export destinations, dominated by a big US customer base.
The organic trade has burgeoned since Sanger began testing its options overseas nine years ago selling just 66 head a week through its subsidiary The Organic Meat Company.
It now moves about 400 carcases weekly, and since 2009 has built its lamb business to about 500 a week.
When the new Arcadian 50-50 joint venture kicks off next month it will be Australia's biggest organic meat business, handling about organic 2000 lambs and 450 cattle a week.
Sanger's Alister Ferguson and Cleaver's Ken Taylor will serve as joint chief executives based at Sanger Australia's Sydney headquarters.
Sanger chief executive officer Richard Rains said the new business developments took advantage of meat sector avenues with good growth prospects.
The IBBCO deal makes Sanger the largest non-packer meat exporter in Australia by far, with a much improved footprint in South East Asia, Africa, the Middle East and Russia.
IBBCO exports up to 50 containers of meat products weekly - slightly less than Sanger whose markets concentrate on the higher value retail, hotel and restaurant categories.
IBBCO's product range includes frozen and chilled beef, mutton, lamb, chicken, turkey, goat, pork (including wild boar), venison, kangaroo and horse meat and by-products, plus dried and frozen pet food.
"They have a mature business in Russia and are very strong in Africa, all of which will enhance and complement our own market strengths," Mr Rains said.
"We already have a good beef footprint in many parts of Asia - it's the fastest growing market area - but IBBCO gives us a wonderful market spread, particularly with products such as pork, chicken and offal."
Both business deals provided a greater base from which Sanger could build its business, employing operational synergies to attract better freight rates and product use efficiencies.
The Arcadian deal with Cleavers was also an ideal way to lift Sanger's lamb trade involvement to levels that complemented its beef strength.
IBBCO principal Paul Ibbotson, who will move most of his team to Sanger's head office, said while both companies had similar businesses they had focused on different product strengths in different markets in the past.
However both Sanger and IBBCO do operate poultry meat export businesses overseas, in Brazil and the USA respectively.
At home IBBCO is Australia's biggest poultry products exporter, with a big stake in special lines such as mechanically extruded chicken protein to countries such as the Philippines.
Sanger, founded in 1973, currently handles about 8pc of Australian export beef trade - a market increasingly dominated by big name meat processors JBS and the Cargill-backed Teys Australia, whose meatworks stretch from Tasmania to North Queensland.
Sanger's close ties with NSW processors Bindaree Beef and Monbeef and Victoria's RH Collinson are complemented by marketing relationships with many other plants, including the big Casino abattoir on the NSW North Coast.
Source: farmonline.com.au
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