Australia - Cargill and Teys Bros

12 Feb 2011

GIANT US farm commodities processor and marketer, Cargill, has confirmed it is seriously considering buying the Packer family's Consolidated Holdings share in Australia's second biggest meat processor, Teys Meat Group.



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In 2002 the Packers' Consolidated Meat Group merged with the South East Queensland-based Teys Brothers family processing and beef production business forming the Teys group.


Cargill Beef Australia's general manager, Andrew Macpherson, said his company saw "strategic synergies" in teaming up with Teys.


The 50-50 Teys-Packer joint venture has beef processing plants at Beenleigh, Biloela, Innisfail and Rockhampton in Queensland, Katherine (currently mothballed) in the Northern Territory and Naracoorte in South Australia, plus a 30,000-head feedlot on the Darling Downs, a tannery, a wholesale meat division, and a value-added facility.


The business turns over more than $1.2 billion a year.


Cargill's possible bid plans are being monitored by the Australian Competition and Consumer Commission.


Cargill, which moved into the Australian beef market to buy the Wagga Wagga abattoir in 1991, has been looking at opportunities to develop its processing and marketing activities for several years.


It also owns a meat boning and packing site at Tamworth and the Jindalee feedlot at

Stockinbingal, near Wagga.


Mr Macpherson said discussions had been narrowed down to dialogue with Teys during 2010 because "we believe it has the most strategic potential", but nothing was likely to come to a head for some months.


While a relationship with Cargill would provide Teys with a potential springboard into a more beef markets, including overseas opportunities - also making the company more competitive against fast-growing Brazilian-owned meat giant, Swift Australia - Mr Macpherson said talks were yet to define specific market initiatives.


Teys Group chief executive officer, Brad Teys, said any joint venture with Cargill would focus on best practice sharing of resources, which may involve expanding into new markets.


"Teys fully intends to be around in this business for the long haul, but we have a very good strong base for a good joint venture opportunity," he said.


The Teys business was founded by four brothers who learnt the butchering trade as youngsters, building their skills to run a series of butcher shops in Brisbane.


During the 1946 meat workers strike they purchased a small slaughter yard at Beenleigh south of Brisbane, to supply their shops, beginning what was to grow into a major meat processing business.


Teys' operation is second largest in throughput in Australia behind Swift's activities at 10 processing plants and five feedlots spread from North Queensland to Victoria, Tasmania and King Island.



Source: farmonline.com.au


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