Inverell #218. NSW

Located in northern NSW, privately owned abattoir more commonly known as Bindaree Beef. Recently received $23M government grant for a biogas project. Negotiations with union regarding EBA have stalled, workers have had a number of stop works in recent months over pay disagreements.

Other Names

  • JR Meats – Owner is JR McDonald
  • Bindaree Beef – Owner is John R McDonald
  • Yolarno Pty Ltd
  • Purchased by Archstone Investment in August 201761

Current Operation

Location   

  • Inverell is located in north east NSW.
  • Abattoir is located Gwydir Highway Inverell.

Inverell

Inverell 2Hema Maps – Australia Truckies atlas.

Owner/s

  • North West Exports Pty Ltd3
  • Smorgons35
  • Bindaree Beef2
    • Family owned and operated2
      • John McDonald.
    • Manager Leigh Belbeck4
    • Took over operation around 1995/964
    • Owned in the past other abattoirs at Murgon (QLD) and Orange (NSW)
  • Archstone Investment purchase a 51% stake in business61.
    • Hong Kong based, Australian citizens. The Hui Family61.

Operation 

  • Ausmeat Accreditation #021822
    • Yolarno Pty Ltd.22
  • Export abattoir, beef and offal.22
  • Process 1,300 cattle per day  2

    • 5,600 cattle per week16
  • Employs over 600 people2
  • Location is strategic to ensure source of cattle 12 months of the year2
  • Abattoir and holding pens 143ha, adjoining farm 491ha8
  • Inverell is the largest abattoir in NSW25

History

1970’s

  • Near fatal blow to private processors when State governments stepped in to assist financially troubled council-run abattoirs6, such as Gunnedah abattoir (NSW)

1951

  • Abattoir established as North West abattoir2
    • originally processing both sheep and cattle2

1976

  • Plant becomes single species plant only processing sheep.2

1995

  • At this point in time owned by North West Exports Pty Ltd.3
  • Abattoir closes3
    • Loss of 450 jobs3
    • Abattoir was the districts largest employer.53
    • Inverell at the time had population of 10,000 people.53
  • Operations of the facility
    • Plant had been affected by strikes from time to time.53
    • Was a poor water supply at the plant.53
    • Processing plant was old and in much need of refurbishment.53
    • Was a forlorn hope the facility would be reopened.53
  • Area is still suffering from aftermath of catastrophic floods few years before3
  • Abattoir purchased by Bindaree Beef around this period4
    • confirmed Bindaree beef acquired plant at this time2
    • clearly communicated to all that employees must be drug and alcohol free.53
      • work would be hard but teamwork was main.53

1996

  • Up to half of NSW 56 abattoirs could close with the loss of up to 5,000 jobs1

    Authors Note – Not sure if Inverell is solely a sheep abattoir at this point as in latter years it processes cattle. In regards to cattle processors, the majority of live export cattle during this period would have been Bos Indicus or crosses to South East Asia markets, sourced from mainly northern Australia. Not animals suited to heavy slaughter in Australia and from herds whos’ production was not likely destined for abattoirs in NSW.

  • LE exports 1990_1998_edited-2Source – Live Cattle Exports. Australian Commodities Vol 5 #2 June 1998

     Chart showing the high volume of South East Asia live cattle export destinations period 1990 – 1998

1999

  • February. 143 head of cattle are condemned after tests show endosulfan residues 5 times higher than Australian maximum residue limit (MRL)23
    • Animals had been worth $525 a head – $75,000 in total23
    • Residue level of 1mg/kg had been detected23
  • $180,000 worth of processed beef was downgraded from export standard for being above 0.1mg/kg but below domestic requirement of 0.2mg/kg23
  • Authors note – Endosulfen was a product found in herbicides and some agricultural chemicals used on crops such as cotton, tropical fruits, vegetables and nuts.
    • Endosulfen was banned from Australia in 2010.

2001

  • Census figures show 7,800 abattoir jobs lost in regional Australia between 1996 to 200150.
    •  A further 2,160 were lost from Abattoir closures to 26/10/200350
  • Authors Note – these figures don’t match ABARES.
    • 1996/97 ABARES ACS 1999 Employment in meat processing 28,900 people
    • 2000/01 ABARES ACS 2003 Employment in meat processing 28,000 people

2002

  • July. recommenced slaughtering cattle but don’t hold the complete environment protection authority licence to kill cattle15
    • regarded as a clerical error when EPA licence was sought for an increase in volume, wasn’t picked up until July 2003.15
  • December. Facility is not meeting Environment Protection Authority standards on odour control24
    • odour is caused by effluent currently stored in dams at the site24

2003

  • June. Forced to lay off 70 employees4
      • 30 casuals4
      • 40 permanent staff4
    • First time in 8 years employees laid off.4
    • Reasons cited for lay off4
      • Drought causing a drop in stock numbers was the greatest problem4
      • High Australian dollar – makes less attractive in export4
  • Production dropped by 20% in last 6 months, many abattoirs having the same problem4
  • Recently odour problems from the plant have been occuring15
    • failure of aerobic and anaerobic ponds to break down organic matter, in particular blood15

2007

  • Bindaree Beef sell Murgon abattoir Otherwise known as South Burnett works.

2009

 

2010

  • April Inverell council refuse an application to financially back the abattoir27
    • Money was to be for expansions27
    • Amount applied was $30M27
      • Create 600 jobs27
    • Council refused as it could not afford the money without reduction of services to the community27
      • Legislative laws that restrict council finanical support of private enterprise27
    • Abattoir was appealing to the community to lobby council to change position27
      • Abattoir want to stay but need finanical support to expand27
  • July. Fear that beef imports will shut down facility4
    • due to Australia negotiating free trade agreements and abolishing  9 year ban on beef imports from mad cow countries.4
      • Mad cow disease is only present in spinal column, only muscle cuts are imported.4
  • currently employs 600 people at Inverell.4

 2011

  • Bindaree Beef Inverell on video showing Cattle slaughter from live animal to point of retail.
  • Authors note – I highly recommend viewing of this video it is an extremely informative short narration of how a live animal is prepared for slaughter, stunned and the carcase processed – From Farm gate to your Plate.
  • Bindaree Beef video 2011
  • Transformation of organic waste into methane idea begins39
  • Approximately 65% of production is exported50
    • 35% sold on domestic markets50
  • Census figures show 7,800 abattoir jobs lost in regional Australia between 1996 to 200150
    •  A further 2,160 were lost from Abattoir closures to 26/10/200350
  • Authors Note – these figures don’t match ABARES.
    • 1996/97 ABARES ACS 1999 Employment in meat processing 28,900 people
    • 2000/01 ABARES ACS 2003 Employment in meat processing 28,000 people
  • Australian meat processor corporation predicts that 20% of the currently remaining Australian abattoirs will be closed within the next 10 years50
  • Most abattoirs that have closed in the past 15 years have been supplying the domestic market50

2012

  • Bio-digester and rendering plant proposal7
    • $43M project7
    • highly effective waste treatment system to produce biogas, clean water and liquid fertiliser.7
    • utilisation will generate power and steam for on-site use7
    • replace rendering plant that will use less electricity and steam7
    • First of its kind in Australia7
    • Planned construction to begin July 2014, in operation March 20157
  • Current waste process8
    • waste effluent travels to floatation tank, then pumped to anaerobic lagoon8
      • waste water from the lagoons is used for farm irrigation8
    • Paunch material (internals of guts and stomachs) is used on farm as land fill8
    • steam is produced by 2 coal fired boilers8
    • All animal by products are cooked to be pressed and used at meat meal or tallow8

biogas #1_edited-1Source – Bindaree Beef Preliminary environment Assessment – Rendering plant and biodigester plant.

The current abattoir meat processing facility showing the current lagoons

biogas_edited-1Source – Tony Windsor Independent MP, Media release. 03.07.2013.
Proposed establishment of biogas and rendering system

  • November. Pilot biogas and rendering plant is installed31
    • Cost $2M31
    • Making adjustment to find best operation33
    • results are far better than they had hoped for33
      • Amercian suppliers have been amazed33

2013

  • Biogas system Federal Government contribution9
    • Total Project to cost $45,833,306.009
    • Grant Amount $22,941,653.00 (50%)9
      • funding not provided by ‘Australia’s carbon price’ via clean technology Food and Foundaries investment program’ but directly from government revenue from carbon tax.10
    • Total taxable emissions 2011/12 23,345 tonnes CO2-e9
    • Total taxable emissions after project 1,253 tonnes CO2-e9
    • Carbons emissions reduced by  98.58%9
      • equivalent to removal of 60,000 cars from the roads over 10 years10
    • Total annual projected operating cost savings $2,442,544.009
    • Total annual additional income $1,1796,150.009
    • Utility cost of processing cattle cut by third for every animal9
    • extra production shift create 200 new jobs9
    • fertiliser for sale will create 10 new jobs9
    • Previously Class D nutrient rich water produced, project will produce Class A9
    • No need for landfill use9
    • saving 7,200t coal burning a year9
    • no odour from lagoons or smoke from coal.9
  • The system will be a world first biogas project.11
  • American technology, methane is retrieved,liquid fertiliser and Class A water.11
  • Pennsylvania-based organic waste-to-energy specialist28
  • Bioconversion Solutions28
    • methane is captured and stored, cleansed and then used to fire gas-fired boilers11
    • technology has the capacity to bio-digest the stomach contents of animal, which has never been done in Australia.11
    • undigested grass, manure & blood will go into an equalisation tank, pH levels are corrected before pumped into a anaerobic bio-digester33
      • 1st gut of the animal – normally very difficult to process and was previously disposed of in landfill37
    • organisms do work in bio-digester to generate bio-gas33
      • also produces fertiliser & Class A water for irrigation33
  • $2M had gone into research of the project10.
    • on-site pilot project is already operating to prove the system works10
    • Bindaree staff visited a site in USA Philadelphia to see the technology at work
  • Installation of project means Bindaree Beef no longer liable to pay carbon tax price.10
    • site had previously been identified among 10 or 12 largest Australian processing sites10
    • directly liable for carbon tax based on yearly carbon emissions above 25,000t10
  • July. Estimates of 700 workers now at Inverell.12
    • almost 5% of the city’s population13
  • September. Project and grant have now been formally approved.13
    • site preparation to start early 2014, completed within 2 years.13
  • November. Article questions the issue of transparency of the grant and its sheer size compared with other grants in the industry14
    • A copy of the grant submission isn’t available, “commercial in confidence” reason cited by government and accounting firm who assisted with grant application.14
    • Independent MP of New England – Tony Windsor was instrumental in keeping Gillard labour government in power.14
    • John Clements – who was advisor to Windsor now works for Bindaree14
    • When Abbott liberal government got in power – announced would disband the Clean energy finance corporation14

Photo. coal pile_edited-1

Inverell Abattoir coal pile. Source ABC rural 07.03.2013

2014

  • February. Plant infrastructure expansion enabled employment of 150 new employees25
  • Pay dispute over negotiation of bargaining agreement (EBA)16
  • Meat Workers Union (MWU) say – Grant Courtney – radio interview16
    • 450 people directly employed at plant, 165 are union members .16
      • Authors note – 36% of workforce are union members
      • Grant Courtney claims union represents 50% of the workforce17
    • Another article cites 800 workers at this point in time25
      • 238 employees eligible to vote25
        • 162 actually voted25
    • Company fears stoppages would cripple production
    • Union members allowed to vote Protected action ballot – 88 chose not accept agreement16
      • Authors note – 19.5% of workforce being union members voted for non acceptance of EBA.
    • Under the Commonwealth government Fair work Act – right to strike.16
      • voted to proceed with industrial action19
      • rolling stop bans and stoppages are threatened17
      • 2 to 8 hour stoppages to begin from 24th Februrary.19
      • MWU – Grant Courtney spoke to JR McDonald (Owner Bindaree Beef) – if stoppages occur, plant would be shut down.19
        • Authors Note – If a plant is under industrial action, stoppage or ban (control of workers) there is a point at which the workers receive entitlements, plant may still be in partial operation so some are still working. If it is shutdown then the control is in the employers hands and the rules of payment are different for entitlements and all workers are affected irrespective of if in a union or not.
    • Strike at this point not an authorised action by union as that requires 72 hours notice to employer16
    • MWU say Bindaree Beef offering16
      • Want to take away gauranteed pay for Christmas and Boxing day16
      • force work on ANZAC day16
      • offering 0.2% wage increase per week in16
        • 1st year – ($1.46 for lowest paid to $2.17 for highest)16
        • 2nd year – 2.8%16
        • 3rd Year 2.8%16
    • MWU say they want 3% wage increase in first 12 months16
      • Fair work increases minimum wage is $17 per week16
      • Increased payment for slaughtermen, boners, carcase graders and cleaners19
  • Bindaree Beef say they voluntarily increased the wages $25 per week when the previous EBA expired in mid 2013 for all workers.16
    • Company and AMIEU had agreed on arrangement for next 4 years.16
    • Grant Coutrney part of the negotiation and agreed to it, verbally stating support.16
    • Production based incentives mean 3% will be easily exceeded as production expands.19
    • since agreement union has come back twice wanting additional benefits and company agreed.16
    • Now is the third time and the union are asking for another $2 per week.16
  • 800 workers employed at Inverell.19
  • Latest offer is extra $25 -$75 a week, depending on grade of the worker.19
    • union demand amounts to $27-$77.19
  • Bindaree workers receive19
    • $80 attendance allowance – for turning up to work 5 days in a row19
    • $5 a day – ‘awful allocation allowance’ – paid to workers for dealing with back tripe.19
    • Grade 1 slaughtermen get $7 ‘handling bonus for every animal processed over 2019
      • worth an average $77 per day19
  • Former agreement19
    • Grade 1 slaughtermen and neck boners earn basic wage $689.3019
      • is actually $1,166 with bonus’s on average for 201320
      • will be more in 201420
    • Carcase graders get $643.7019
  • Wage increase agreed too with Bindaree and AMIEU will cost Bindaree $8M more.20
  • March. Workers stop work at Inverell18
  • Stop work meeting occured 05/03/201429
  • 120 Union members attended off-site meeting29
    • First time work is stopped in 18 years.18
    • Minister of Environment – Luke Foley says18
      • 85% of voting employees rejected proposal of 0.2% increase.18
      • Past 16 years workers have been forced to work ANZAC day18
      • meatworkers are among lowest paid manufacturing workers in this country18
      • NSW abattoirs are very full and are doing very well.18
      • The Mudginberri abattoir (NT) dispute pioneered new right attacks on wages and conditions.18
    • AMIEU pushing for 3% – 0.4% above CPI29
      • $19.60 for lowest paid per week29
      • $27-$28 for highest29
      • …that is a reasonable wage claim, clearly this company can afford it, (because) this company is doing record kills at the moment” Grant Courtney29
    • Bindaree offered 2.8%, includes 2.6% passed on in June 201329
      • Will adopt National Employment Standard in regards to public holidays29
        • company has the right to ask employees to work and employees have right to refuse29
      • irresponsible to offer further pay increases without productivity agreements29
        • Wages increase over next 4 years $8M29
  • New range of high quality grass and grainfed beef brands21
    • based on Meat Standards Australia’s Optimisation model and MSA index21
    • improve communication with both producers supplying the plant and end-user consumers.21

brand #2_edited-1

brand #2 edited

Source www.bindareebeef.com.au
Only some of the brand names promoted by Bindaree Beef.

  • June. Application is lodged with NSW major projects to build rendering and bio-digester plant30
    • Capital outlay $43,945,00030
    • construction jobs required 64 people30
    • Operational jobs 1 person30
  • July. Clean Energy Finance Corporation (CEFC) agree to co-finance Bindaree Beef project at Inverell.31
    • Clean Energy Finance invests commercially to increase flow of funds into renewable energy, energy efficency & low emissions technologies32
    • Invest by way of direct investment that attracts private sector finance32
      • with stategic co-financing partners32
      • CEFC operates under Clean Energy Finance Corporation Act 201232
    • Funding is via special statutory appropriations to ensure capital and ability to undertake investment32
      • CEFC Act establishes a CEFC account which receives $2B per year32
        • Funding 01/07/2013 to 201732
        • Amounts can be rolled over into future years if not invested entirely in one year32
  • Abbott government tried to dismantle CEFC in early 201437
  • pressure from power and fossil fuel companies37
    • CEFC will provide finance of up to $15M31
      • commercial terms with no concessionality31
      • worked with Bindaree for 2 years31
        • initially as Low Carbon Australia31
    • Australian Government will provide grant $19.7M31
      • through AusIndustry31
    • Bindaree Beef and it’s own bank will provide rest of funds31
    • Project total estimates now $46M
  • Purpose of the project31
    • Deliver significant boost to the competitiveness of the Bindaree Beef operations31
    • Employs 830 people31
      • Inverell population 16,00033
    • Annual Turnover $400M31
    • Estimated market share 2.5-3%31
    • Plant is capable of processing 1,200 head of cattle a day31
  • Project Impact31
    • Cut energy bills by 50%31
      • save $2.4M in operating costs33
    • Eliminate use 7,300 tonnes per annum of coal31
    • Avoid shutdowns due to power fluctuations31
      • power fluctuations or brown outs cause the boiler motor to shut down33
    • Produce 1.2MW – 1.6MW of power31
    • Reduce annual GHG emissions by 76%31
      • 32,720 tonnes Co2 pa31
      • Lifetime savings of 654,400 t Co231
      • Taxable emissions will go from 28,000 tonnes to 1,200 tonnes33
        • elimation of 95% taxable emissions33
        • Equivalent to removal of 60,000 cars over 10 years33
    • Generate income through fertiliser sales $1.7M per year33
    • Reduce direct pollution from smoke33
      • When boiler motor stops light grey smoke from chimney stack turns thick and black33
    • Reduces all odours as the anaerobic lagoons will no longer be needed33
    • Company is value adding to it’s core agriculture business rather than exporting the raw product.37

bio digester. meateng_edited-1

Inverell abattoir proposed biodigester and rendering plant
Source www.meateng.com.au

  • Australia is allowed re-opening of beef exports into China following a 9 month stoppage55.
  • September. Some of the workers have been at the facility since the current owner JR MCDonald purchased the facility 18 years previously (about 1995/1996)35
  • JR McDonald speeks about reform in the industry36
    • MSA grading36
      • 8M head Australian cattle slaughtered every year36
        • only 2M head graded under MSA36
      • MLA plans to increase to 3M head36
      • Vast majority of cattle sold through saleyards are not under MSA36
        • Yet very good types of cattle are sold36
          • Not under MSA if sold as mixed consignments36
            • means 2 good beasts in a mixed lot don’t meet MSA36
            • Large lots of hundreds of head meet MSA but boning group represents lower end of scale36
        • MSA started as simple system36
          • grades ranging from 1 to 6, based on marbling and age36
            • mainly a system to grade British breeds36
          • Now MSA is unwieldy – with 18 boning groups36
            • include old bullocks and old cows36
        • Beef industry is renowed for manipulation and control36
        • Dumping of old cows on the domestic market is a particular problem36
          • Cow being sold beside prime, skinless chicken36
    • Domestic market should not be given more importance36
      • 65% of meat is exported36
        • represents 80% of the industry value36
      • old cow should be labelled ‘economy’ steak rather than low grade36
    • Trimming costs in abattoirs needs to be lowered36
    • Australia is expensive place to do business36
      • Australian Government costs $18 per beast36
        • US $136
        • Argentina $036
      • Costs should be able to get back to $2 head in Australia36
      • Costs $300 a beast to process in Australia36
        • US is one third of that36
      • Inverell power costs at the plant $10,000 a day36
      • AQIS costs $6,000 a day36
      • Workers Compensation $10,000 a day36
        • plus wages for 830 staff36
    • Currently record kills are bringing in big money for abattoirs36
  • Bindaree beef looks to sell ‘retail ready’ beef to China38
    • Deal signed – Bindaree Beef / Sanger Australia38
      • Packing Australian beef in Chinese language packaging and air-freighting to China38
      • Bindaree already sell primals to China38
        • this opportunity will allow value add of product that normally went to US grinding38
      • Product is MSA graded to align with cooking methods38
    • Increasing market for high-quality meat38
      • increasing mistrust for low-grade produce due to food substitution and poisoning scandals38
      • Small percentage of Chinese who can afford Australian produce38
        • small percentage of a huge population is still a substantial market38
    • Bindaree will release new payment grid in October38
      • provide incentives to producers to meet brand specifications38
      • acknowledge processors fortunes are tied to producers38
      • supports Bindaree moves from shipping a commodity to supplying a product38
  • November. Australian-Sino 100-Year Agricultural and Food Safety partnership (ASA 100) is established57
    • Initiative between Australia and China to position Australia as a supplier of premium agricultural products that are friendly and safe for the next 100 years57.
      • Unite Australia in market approach57.
      • Competitive markets supported by efficient modernised operations57
        • Energy efficiency and better access to workers including 457 visa applicants57
  • December. NSW Minister grants permission approval for the rendering plant and digester to begin construction39
    • Work should begin in February and completed 18 months39
      • Actual power output when fully operational is difficult to estimate39
      • Should supply one-third of energy needs at the plant39
      • Coal fire system will stay as a back up incase needed39
  • Chinese free trade agreement signed with Australia expected to enable red meat producers$11B boost through abolition of tariffs over the next 9 years.40

2015

  • January. Bindaree Beef seek a strategic investor to make $100M cash injection40
    • Aim to increase processing capacity and enter new export markets40
    • Hired PricewaterhouseCoopers Securities – Brisbane40
      • Calling for first round bids in late February40
    • Bindaree is one of top five red meat processors40
      • capacity to handle 1,300 cattle daily40
    • Includes Sydney based sales & trading arm40
      • supplies beef, lamb, pork, veal and poultry to more than 40 countries40
    • Bindaree Trading in 2013/2014 year40
      • Over $40M in earnings before interest, tax and amortisation (EBITDA)40
      • $571M revenue40
      • Forecast ambitious 61% EBITDA in 201540
        • Difficult to see how 61% can be supported if Bindaree/Sanger relationship is simply Sanger selling Bindaree’s product41
          • Means Bindaree don’t control sale of it’s own product41
    • Industry sources estimate value of business $400-$500M40
      • Typical processing sector benchmark trading 4.5-5 times EBITA41
        • Values Bindaree at $200-$250M41
    • Possible sale process masqueradeing as strategic stake auction40
    • Sales pitch
      • growing global beef consumption40
        • Particularly China’s emerging middle class40
      • Industries high barriers to entry40
      • large-scale processing facilities40
      • Bindaree brand portfolio40
  • If overseas injection occurs makes a mockery of JR McDonald’s longstanding public opposition to foreign ownership of Australian beef processing assets41
  • April. Mr John McDonald, Chairman of Bindaree Beef writes a submission to the Senate Inquiry into the effect of market consolidation on the red meat processing sector58.
    • There is massive amount of collusion and misuse of power in the processing industry58
    • Consolidation having a huge impact on farm gate prices, up to 80% of beef producers in bad financial situation58
    • Existing selling structures are satisfactory – Problems are due to consolidation causing less competition58
    • Regulatory environment is working OK58
    • Rural debt crisis is imminent58
      • Bindaree Beef has been approached regularly for financial assistance and support to producers in the Goondiwindi, Moree, Coonamble, Casino and Inverell areas58
        • Bindaree Beef has leased some properties and purchased stock58
          • Allows guaranteed cashflow to producers58
        • Rural debt has esculated from $20B in 2000 to $65B in 201558
        • Nippon, JBS and Cargill have taken over the beef industry58
          • Control all meat industry boards58
  • July. Bindaree Beef merge with meat marketing and distribution company Sanger Australia42
    • New Company – Bindaree Beef Group42
      • Effective 06/07/201543
      • organisations combined $750M per annum43
        • 350 customers43
        • 50 countries – Including North & South America, China & Europe43
    • two companies have worked together for 40 years42
      • Other articles cite 42 years44
      • Negotiations began 18 months ago44
      • Bindaree supply up to 55% of the product which Sanger sells44
    • Sanger will continue to operate as an independent subsidiary42
      • sold $650M worth meat last year44
  • Script Merger42
    • No money is involved in the transaction42
    • Sanger have taken shares of Bindaree Group42
    • Chairman – JR McDonald42
    • Inverell facility can process 6,000 cattle a week42
      • cattle supply base is New England area42
      • prospered when dozens other regional meatworks have failed44
  • Enables growth of the business next 20-30 years43
  • 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.

NSW abattoir capacities Dept ag consolidation_edited-1

Capacity of Major beef abattoirs in NSW. Page 15.

T2 Throughput state beef_edited-1

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

M4 direct cattle movements NLIS QLD_edited-1

2012 NLIS Cattle Movements to abattoirs. Pg 25

F12 hourly labour costs food manufacturing_edited-1

Hourly Labour costs for food manufacturing industry. Pg 30

  • August. Bindaree Beef Group Executive officers46
    • James Campbell – CEO, effective 18/08/201546
      • Family farm, Boorowa NSW46
      • Double degree in commerce and business administration46
      • KPMG – accounting involving restructuring and insolvency for corporate agricultural businesses46
      • ANZ agribusiness boss in China46
        • 4 years in Shanghai46
    • Graham Greenleigh – former CEO46
      • Led Sanger’s 2 years46
      • Now Director of groups business development director46
        • Been director at Sanger since 199546
        • Started with Sangers 198746
  • Bindaree are in negotiations to buy a feedlot at North Star in NSW46
    • NSW largest feedlot 46
    • capacity 20,00046
    • Annual turnover capacity 80,00046
    • Paid $25M in July.51
  • September. Sangers (a division of Bindaree Beef Group) strike a deal with JD.com, an online retailer47
    • exposure to China’s 600M internet users47
    • Brand will be developed exclusively online47
    • Beef will be processed at Inverell, packed into consumer ready packs, chilled and sent to JD’s cold storage wharehouses in China47
      • JD.com had invested heavily in distribution infrastructure47
      • employing 30,000 people47
    • JD.com closed loop supply chain, dealing directly with suppliers47
      • ensures product integrity47
      • protection against imitation is key to partnership decision47
    • Product will be cheaper cuts of beef normally made into minced meat and fast-food hamburgers47
      • initially a modest amount will be exported47
      • online retail being the fastest growing component of purchasing in China47
      • range of meat products will broaden overtime47
      • Products will begin sale Mid September47
  • One of China’s largest meat processors – Shandong Delisi Food Co is in negotiations with Bindaree Beef regarding a strategic stake in the business48
  • Shandong Delisi Food  sign $140M agreement for a 45% stake in Bindaree Beef49
    • transaction is still subject to foreign review board approval49
    • one of the first major deals to be announced since the China/Australia FTA49
    • Advise to the transaction supplied by King & Wood Mallesons (KVM).52
      • required navigation of complex Chinese regulatory  requirements.52
    • Delisi49
      • Is listed on the Chinese Shenzen Stock Exchange49
      • Market capitalisation $1B49
      • Sales network can reach 700M people49
      • 20,000 busines customers51
      • Is the largest pure-play pork processor in the worlds51 largest pork-consuming country51
  • October. Delisis injection will mostly be spent around the Inverell plant51
    • upgrade technology of freezing, chilling and boning51
      • help to improve yield and efficency51
  • Bindaree Beef is now valued at $400M51
  • December. Function is held to celebrate 20 years of Bindaree Beef.53
    • Lot of challenges – plant had been old, finance to modernise was hard to get and costs crippling.53
    • Over the last 20 years Bindaree has.53
      • processed 5.2M cattle.53
      • employed 7,000 people.53
      • Paid $750M in wages and salaries.53
      • Returns to cattle producers has topped $5B.53
      • 225,000 truck movements in and out of the meatworks.53
      • Beef has been exported to 70 countries.53
  • Single lane bridge between Walcha and Inverell would be upgraded to allow heavier truck access.54
    • current wooden bridge can only handle B-doubles.54
    • New concrete bridge will handle much heavier loads.54
    • Vital access improvement for transport to and from Inverell abattoir.54

2016

  • June 30. Deadline for contract agreement Delisi Group60.
  • Bindaree Beef reduce casual employee numbers by around 100 personal60.
  • July. Contract agreement date for deal with Delisi group is not finalised59
  • Balance sheets of meat processor would have looked far better 12 months previously60
  • Rumours of staff retrenchment would halve the plants current carrying capacity60
  • August. Contract agreement date for deal with Delisi group is not finalised59
  • November. Two large Chinese investment deals to purchase Australian-owned processors have failed to go ahead59.
  • Bindaree beef $140M investment deal with China’s Delisi group has not been executed59.
    • Speculation is the hesitancy to complete the deal is linked to current processing industry profitability59
    • Discussion’s had re-opened with other interested parties59
  • Other facility considering joint venture agreement – Churchill #8Q. QLD59.
  • Bindaree was currently processing 4,000 cattle per week59
  • National Beef herd has sunk to 20 – year lows59
    • Balance sheets in the red with large losses at processing59

2017

  • August. Bindaree beef sell 51% of business to Hong Kong based, Australia citizens, the Hui family, Archstone investment61
  • Reported $120M sale 62
    • Hui family is led by Hue Mang Mau61.
    • Primary business interests are in property development in Asia controlling businesses on Shanghai and Hong Kong stock exchanges61.
    • Also hold some property in Western Australia61
      • Archstone established Consolidated Australian Pastoral Holdings (CAPH)62.
        • Moola Bulla station, Shamrock station62.
        • WA properties will be more geared to live export62.
    • Intention to make further acquisitions of cattle properties in the Inverell area61.
  • Bindaree has current operating capacity of around 900 head cattle per day61
    • last 2 years has seen a significant reduction in numbers processed due to severe cattle shortage61.
  • Bindaree Beef will establish 7 member board61
    • 3 from original Bindaree beef group61
    • 4 from Hui/Archstone investments61
    • Andrew McDonald to remain as CEO61
    • Sanger Australia to retain a minority shareholding with others61.

2018

  • January. Bindaree Beef are concerned about the increased competition of Brazil and Argentina into Hong Kong and China frozen meat products63.
    • Brazil regained access to Chinese markets mid 201563
      • Brazil supplied 30% of China’s imported frozen beef in 201663
    • United States gained access to China in 2017 after a 14 year abscence63
    • Argentina have just signed a bi lateral agreement with China to supply beef and sheep meat63.

Source MLA Snapshot. China January 2018.

Types of Australian beef exports that are sent to China

Source MLA Snapshot. China January 2018

Proportion of Australian beef exports that China receives.

 

Sources. Inverell. NSW

  1. ‘5,000 jobs at risk:Abattoirs facing closure’ Sydney Morning Herald 21.05.1996
  2. www.bindareebeef.com.au. accessed 27.02.2014
  3. ‘Inverell business community’ Parliamentary Hansard 01.06.1995
  4. ‘Drought, dollar forces lay offs at Inverell abattoir’ The Northern daily Leader. 18.07.2003
  5. ‘Coles, Woolworths to shun beef imports’ Perth Now 02.03.2010
  6. ‘Who is JR McDonald’ The Land 05.05.2010
  7. ‘Bindaree Beef  – Bio digester and Rendering plant’ www.mitchelhanlon.com.au. accessed 27.02.2014
  8. Bindaree Beef Preliminary environmental assessment rendering plant
  9. ‘Carbon price secures Inverell’s future’ Tony Windsor MP. Independent for New England 03.07.2013
  10. ‘Bindaree Beef scores unprecedented $23M grant for carbon price’ Beef Central 03.07.2013
  11. ‘NSW meatworks soon to be cooking with biogas’ ABC Rural 03.07.2013
  12. ‘One of Australia’s biggest abattoirs proves Gillespie wrong’ www.roboakeshott.com 04.07.2013
  13. ‘Innovative regional thinking behind world first biogas project’ Beef Central 13.09.2013
  14. ‘Beefed-up grant raises eyebrows in New England’ www.smh.com.au 09.11.2013
  15. ‘Licence blow to beef plant’ Central Western Daily 17.02.2003
  16. ‘Pay dispute at Bindaree Beef’ ABC News. 24.02.2014
  17. ‘Bindaree Beef and unhappy workers negotiate again on Wednesday’ ABC News 26.02.2014
  18. ‘Bindaree Beef wages dispute’ Parliamentary Hansard 06.03.2014
  19. ‘Bindaree beef dispute heats up’ www.farmonline. com.au. 21.02.2014
  20. ‘Bindaree counters union claims’ Stock and Land. 26.02.2014
  21. ‘Bindaree takes new approach to beef brand identity’ Beef Central 03.03.2014
  22. Ausmeat Accreditation listing. accessed 25.05.2014
  23. ‘Bindaree Beef worth $75,000 condemned for high endosulfen residue’ www.erisk.net 24.02.1999.
  24. ‘Bindaree beef in a stink with council’ Central Western Daily 15.12.2002
  25. ‘Rolling industrial stoppages likely at Bindaree’ Beef Central 21.02.2014
  26. ‘Bindaree Beef workers threaten dispute over $2-a-week argument’ www.smh.com. 21.02.2014
  27. ‘Bindaree Beef expansion on hold as council turns down application for funding’ ABC. 16.04.2010
  28. ‘Australia to get it’s first meat waste biogas plant’ www.ben-global.com 06.03.2014
  29. ‘Bindaree dispute continues’ ABC News 10.03.2014
  30. Major projects Planning. NSW 16.06.2014
  31. ‘CEFC finance for Bindaree Beef biogas & rendering upgrade’ CEFC July 2014
  32. www.cleanenergyfinancecorp.com.au
  33. ‘Inverell meat works shows the world….’ 2degreesproject.com.au
  34. ‘Bindaree bio Digester’ Meateng
  35. ‘JR McDonald: a Bindaree Beef legend’ www.northernstar.com.au 11.09.2014
  36. ‘Bindaree Beef Boss on need for red meat reform’ www.ruralweekly.com.au 13.09.2014
  37. ‘No guts, no glory on clean energy’ The Saturday paper 13.09.2014
  38. ‘Bindaree beef carves path to China’ www.farmonline.com.au 29.09.2014
  39. ‘Bindaree plan – bio-digester on the boil’ www.northerndailyleader.com.au 30.12.2014
  40. ‘Bindaree Beef in $500M auction’ www.farmonline.com.au 29.01.2015
  41. ‘Bindaree Beef seeks $100M equity investor’ Beef Central 02.02.2015
  42. ‘Meat Processor Bindaree Beef to merge with meat sales company Sanger Australia’ ABC Rural 08.07.2015
  43. ‘Bindaree Beef and Sanger Australia tie the knot’ www.foodanddrinkbusiness.com.au 08.07.2015
  44. ‘Streamlining supply benefits beef’ www.farmonline.com.au 10.07.2015
  45. Dept Ag. Submission to Market consolidation and the red meat processing sector July 2015
  46. ‘Campbell New Sanger CEO’ The Land 18.08.2015
  47. ‘China’s middle class to get skirt that tastes as good as sirloin’ www.afr.com 03.09.2015
  48. ‘Shandong Delisi to take stake in Bindaree’ www.afr.com 16.09.2015
  49. ‘China abuys 45% stake in Bindaree Beef for $140M’ The Australian 27.10.2015
  50. Bindaree Beef submission Inquiry into meat marketing May 2011
  51. ‘Why Bindaree chose Delisi’ Nth QLD Register 28.10.2015
  52. ‘KVM advises Bindaree Beef on significant Chinese investment’ www.kvm.com. 04.11.2015
  53. John Williams, NSW National Party Senate speech 01.12.2015
  54. ‘Finish line in sight for Abington Bridge….’ www.barnabyjoyce.com.au 14.12.2015
  55. ‘China chilled beef trade re-emerges…..’ Beef Central 07.07.2014
  56. ‘Bindaree beef to China chases premiums’ QLD Country Life 25.09.2014
  57. ‘Bindaree Beef backs ASA 100’ www.farmonline.com.au 14.11.2014
  58. Bindaree Beef. Submission 11. Senate Inquiry Effect of Market consolidation. 23.04.2015
  59. ‘Bindaree, Churchill re-opens investment talks……’ Beef Central 22.11.2016
  60. ‘Is Bindaree’s $140M deal with Chinese investor on the rocks?’ Beef Central 15.07.2016
  61. ‘Bindaree Beef sells Majority stake to Hong Kong based Investor’ Beef Central 31.08.2017
  62. ‘Archstone’s plans for 1 million hectares….’ ABC Rural 20.09.2017
  63. ‘China Argentina beef deal highlights our cost pressures’ www.farmonline.com.au 23.01.2018

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