Dinmore

Current Operation

• Aus Meat Accreditation registration dated 29/12/2015 #235 – JBS Australia Pty Ltd (Dinmore).¹³
  • registered as a Beef, Offal export facility.¹³
• Direct employment enquiries to www.jbssa.com.au  

Location              

• South east QLD
• 40 km west of Brisbane. 9km east of Ipswich

 Owner

• AMH (1999)⁴
  JBS Australia

Operation          

• Export – Beef, Offal¹
• (1999) Nominal capacity 625,000hd per 50 weeks⁴
• Slaughtering, boning, packaging, by-products rendering and hide processing
• Spent 10’s Millions $ over past 10 years on environmental/sustainability projects, in areas like water treatment, establishing excellent performance creditials in the environmental area²
• “Site operates with arguably the most stringent environmental license conditions on waste water management, motor and other noise abatement of any meat plant in Australia”².

Source 2007 Feedback MLA

Other historical and current meat processing facilities located in Australia can be viewed at;

Australian abattoirs inactive map

History of Dinmore #235

1990

• ABARES report – Foreign Investment and Australian Agriculture
  • ABARES foreign ownership 2011

Proportion of cattle slaughtered by ownership of abattoirs 1990
Source ABARES foreign ownership 2011 Pg 31

1991

• 77 Beef export Abattoirs are in operation in Australia at this time.¹⁹
  • 27 have some level of foreign ownership.¹⁹
  • Ownership dominated by Japan, UK and the US.¹⁹

1996

• AMH intend to spend $50M upgrading Dinmore as part of $90M capital investment program across six Australian operations⁶
  • AMH controlled by big US rural commodities trader – ConAgra, a major exporter from North America⁶
  • AMH accounts for 16.5% of Australia’s beef kill.⁶
    • currently owns another 8 facilities but will be consolidating to 5 and closing Beaudesert (QLD), Guyra and Portland (Vic)⁷
      • others owned Dinmore, Townsville, Rockhampton and Aberdeen⁶
        • Author note – not sure of 8th.
      • Intended that 300 jobs would be replaced at Dinmore when expansion completed there⁶

1999 

• AMH owned at this point⁴
• Is the largest plant in QLD at this point.

2005

• Significant regions of drought across QLD.

Queensland drought situation 2003 – 2005 www.longpaddock.qld.gov.au

Queensland drought situation 2007 – 2009 www.longpaddock.qld.gov.au

2010  

• Will drop from 11 to 9 shifts over a 5 day week this year in light of the livestock supply and demand challenges³
• Between Townsville and Dinmore plant 430 people laid off.⁸
• Dinmore current operating capacity 3,300 head a day.¹⁰
  • Mainly to Export 75% – Japan, US, Korea, Taiwan and Indonesia.¹⁰
• Dinmore employs approximately 2,000 workers.¹⁰
  • About 1,700 work in production roles across 2 shifts Monday to Friday.¹⁰
  • The remainder are cleaning, maintenance and head office functions.¹⁰
  • Most Employees are male 70% employed and full-time casuals.¹⁰
  • Around 20% are from overseas – 457 Visa’s China and Brazil.¹⁰
  • 5 year EBA is currently in place, no piecework incentives provided.¹⁰
  • most workers said to be be union members.¹⁰
    • walking delegate employed on site.¹⁰
  • Company has strong internal promotion culture aimed at increasing retention.¹⁰

Major Companies in the Australian Red meat processing industry

Source IBIS world June 2010

2011

• January. Devastating floods across Central and southern QLD and large parts of NSW and Victoria.²¹
  • affected slaughter numbers to abattoirs.²¹
• July.National slaughter rates decline 5%.²²
  • Australian currency pressures.²²
    • A$ is now above US108c.²²
    • economic news out of US could send currency even higher.²²
    • higher A$ would cripple Australia’s already limited price competitiveness for beef in international markets.²²
  • QLD which does approximately half of Australia’s processing capacity.²²
    • Down 8% from the previous week.²²
    • lowest kill recorded in QLD in July for past decade.²²
    • Down 21% on same period last year.²²
    • Significant number of QLD plants only killing 3-4 days.²²
  • listless export beef demand.²²
  • Meat processing and export is low-margin business due to.²²
    • Import duties.²²
      • Indonesia 9%.²²
      • Korea 40%.²²
      • Japan 38%.²²
    • New AQIS charges on meat inspection would add millions to processor costs.²²
  • Is currently a big build up of meat in cold stores due to difficulty in selling into sluggish markets, Japan and the US.²²

• November. ABARES foreign ownership 2011 report is released

Red Meat throughput Australian abattoirs, Foreign and Australian owned 2011 Source ABARES foreign ownership 2011 Pg 29

2012  

• Govt. grant $4.4M with JBS own $4.4M upgrade its waste water treatment system, installing new pre-treatment equipment and covered anaerobic lagoon technology².
• Company’s carbon tax liability was expected to cost $3.5M yr,($23/t) project will save $1M in energy costs and cut liability each year by $790,000.
• Still doesn’t place Dinmore plant below 25,000t threshold, to get below that would cost a further $16M.

2013

• “JBS is in the process of supporting the transition of it’s 457 workforce to permanent residency”⁵
• 457’s residency requires certain level of english speaking, International English language testing system level 5. – often above the level meat workers most parts of world can reach⁵
• Recently completed a $50M upgrade employing most modern techonology available to ensure maximum efficency and consistency of the quality of the product⁹
• Employees 235 people⁹
• Daily processing 3,350 beef or 1,675 head per shift⁹
• November. JBS Swift Australia install closed-circuit television camera’s (CCTV) in it’s Australian meatworks.¹⁶
  • For the purpose of animal welfare and meatworker safety issues.¹⁶
  • CCTV for internal use by only JBS, with no plans to allow outsiders to view the footage.¹⁶
• JBS’s US beef division (which includes Australia) delivered drop in net sales and earnings in it’s third quarter financial results.¹⁷
  • Australia’s division performance and overall contribution to the overall result is impossible to distinguish due to inclusion with US and Canadian beef processing results.¹⁷
  • Earnings before tax $134M,.¹⁷
    • Down by 22.5% on previous quarter.¹⁷
    • Down by 28.4% on third quarter last year.¹⁷
  • result reflection of domestic North American markets.¹⁷
    • Improved performance had occured in Australian.¹⁷
      • Demand had increased in Chinese markets.¹⁷

2014

 

• July. JBS Australia purchase majority shareholding in NSW based Andrew Meat.¹⁵
  • specialise in high quality, portion cutting and further processing of meats for domestic and international restaurant and foodservice customers.¹⁵
  • produce ready-cooked meals.¹⁵
  • company banner Creative Food Solutions.¹⁵
  • Andrew Meat will allow JBS expansion into high growth retail and value-adding segments.¹⁵
• Expansion of the Andrew Meats business will start in November .¹⁸
  • JBS global strategy to expand into value added meat protein – opportunity to expand margins.¹⁸
  • JBS have an existing value-added division – Food Partners.¹⁸
    • supplies food service customers like Pizza Hut and Domino’s with toppings.¹⁸
  • Andrew Meats focus will be produce ready meals.¹⁸
    • ‘grab & go’ beef roasts, designed to compete head on with hot cabinet roast chickens sold in supermarkets.¹⁸
    • Domestic markets were very immature but also with significant growth potential.¹⁸
• At this time JBS operate.¹⁵
  • 10 processing facilities.¹⁵
    • Daily processing capacity of more than 8,000 cattle and 21,000 small stock.¹⁵
  • 5 feedlots.¹⁵
• December. JBS currently operate 12 meat processing plants across 5 Australian states¹¹
  • Wages & local procurement $730M (Excluding livestock purchases)¹¹
  • Employs 8,500 people at the facilities¹¹
    • Employs 12,000 people in Australia¹¹
  • Total revenue of $6.5B¹¹
• 

  JBS processing plants in Australia

  Source JBS submission #50 Market Consolidation.

  • JBS estimates its current share of four eastern states beef kill – 20% (excludes service kill)¹¹
    • JBS share of Australian beef production 16%¹¹
    • Market share of national small (lamb, mutton & goat) 16%
  • JBS spent $2.4M on halal certification costs of approved religious certifiers in 2014²

  2015

  • January. MLA forecast.²⁰
    • Australian cattle herd has gone from 35 year high (2013) to 20 year low (2015).²⁰
    • Australian cattle herd slip to 26.8M head by June 2015.²⁰
      • by 2016 expected decline to 26.5M head.²⁰
      • by 2020 27.9M head.²⁰
    • Adult cattle slaughter expected to slump 15% year on year.²⁰
      • 2015 to 7.8M head.²⁰
      • 2020 expected 7.9M slaughter.²⁰
    • Long term Female average in 2014 52%.²⁰
      • Normally female kill percentage 47%.²⁰
      • Only in years 1977, 1998 & 2003 has female kill been above 50%.²⁰
    • Beef exports record levels in 2014 1.39M tonnes shipped weight.²⁰
      • Expected to drop 20% to 1.3M tonnes in 2015.²⁰
  • March. Foreign ownership of Australian red meat processing facilities
  • 

    Share of Australian red meat processing

    Source The Stock Standard. VFF March 2015

 

• March. Cyclone Marcia cross the Capricornia Coast some plants were damaged.⁷⁰
  • Supply is exceeding capacity in QLD at this point.⁷⁰

Impact of Cyclone Marcia February 2015. www.longpaddock.qld.gov.au

• June. Cost of processing in Australia 1.5-3 times the cost of processing animals in another country¹¹
• cost of processing grain-fed cattle in Australia is twice of the USA¹¹
  • lower levels of productivity in Australia in regards to kg per unit of labour¹¹
  • 2 major differences between Australia and the USA¹¹
    1. Government regulation
       • $10 a head more in Australia¹¹
       • Dept. of Australian Agriculture fully recover costs of meat export inspection and certification¹¹
         • Australia wide DAFF costs $80M¹¹
         • JBS contribute $14.5M¹¹
       • Export plants don’t use DAFF but use approved employees, which plants fully cover costs¹¹
         • JBS estimate an additional $30M at Export level¹¹
       • USA & Brazil governments provide services at no or minimal costs to processors¹¹
    2. Energy Costs
       • $15 a head more in Australia¹¹
  • Technical barriers to trade (TBT’s)- Total value in Australia estimated at $1.25B as identified costs¹¹
    • 261 TBT’s in 40 key markets¹¹
      • 136 have significant trade distortion impacts¹¹
• July. The following charts are from a submission by the Australian government Department of Agriculture to the Senate rural and regional affairs and transport references committee inquiry into Market consolidation and the red meat processing sector.
  • Dept Ag. Submission to Market consolidation and the red meat processing sector July 2015

• 

  • Capacity of major beef abattoirs in QLD. Pg 15

    

    Share of throughput by state for beef in 2014. Pg 16

    

    Major Processing companies by market share May 2015. Pg 16

    

    Cattle Movements to abattoirs. Pg 25

    

    Hourly labour costs for food manufacturing industry Pg 30

October. 10 mayors from Southern QLD form a mayoral group to act as a united lobby group for their region.²⁴

• represent 25% land area of QLD, quarter of QLD cattle and 75% of grain and crop production area²⁴
  • support the Oakey abattoir push for rail transport improvements.²⁴
  • $2M in State and Federal funding is required to fund new rails sidings.²⁴
    • Federal government feel that private investors should fund the improvements themselves.²⁴
    • will add to processor competition in the area.²⁴

• Only 2 abattoirs are currently contracted to be supplied cattle on the Western line.²⁴ JBS Dinmore (QLD) and Teys Beenleigh (QLD)
  • Oakey is to be added, starting January 2016.²⁴
    • Contractually Oakey can recieve cattle but as they have no rail siding this is not physically possible.²⁴

 

• AACo have animals processed at Eastern abattoirs as service kill.²³
  • See year 2013.²³
  • Gross processing costs had increased in the 6 months to September 2015.²³
    • $1.13 risen to $1.21/kg, 7% increase year on year HCW.²³

 

 

• December. ATO publishes tax data for agribusiness corporates.¹²
  • Data interpretation – Companies do not pay company tax on revenue (total income) they pay on profits after paying all expenses, including wages, capital replacement, supplier costs and other operating expenses.¹²
  • Income tax information is for 2013/14.¹²

• • JBS Holdco Australia Pty Ltd produced Total Income $4,040,948,610.¹²
    • Taxable Income $419,882,525.¹²
      • Tax Payable $44,809,334.¹²

QLD Drought Situation 2013 – 2015 www.longpaddock.qld.gov.au

 

Sources for Dinmore QLD. JBS