Mackay

Jo Bloomfield

10 years ago

Mackay abattoir, owned by NH Foods trading as Thomas Borthwick and sons is a modern and currently operating facility. Organically accredited specialising in high quality grass fed beef.

Other Names

Thomas Borthwick
Borthwick’s meatworks
Nippon Mackay

Current Operation

Is currently in operation as at 2016.

Location

Mackay is located on the east coast of Queensland, Approximately 970km north of Brisbane, 334 km north of Rockhampton and 394km south of Townsville.
The Nippon Mackay abattoir is located at Bakers Creek approximately 10km south of Mackay.

Owner

Nippon Meats (Japanese) purchased 1989.⁴
Nippon Meat Packers⁶
- Subsidiary of a Japanese Multinational
- Nippon meat packers incorporated 1978⁶
Source Nippon Meat Packers Australia interactive beef products

This is a great diagram that is able to be clicked on in the Nippon website and illustrates where the various cuts of beef and offal are located in the animals bodies
Nippon currently own 3 operating abattoirs in Australia ( as at 2016)

Operation

Mackay is certified for organic beef production.²
- Specialising in high quality, chilled grass fed beef
- Cattle are sourced from mainly Central QLD
- Export markets include Japan, USA, Republic of Korea, South Africa, Russia, Europe, Taiwan, Mexico, Ukrain and Indonesia.¹³
Nippon currently own 3 abattoirs in Australia,

Other Abattoirs in the region

Pentland (QLD)

Ross River abattoir (QLD)

Townsville – Stuart (QLD)

Australian abattoir locations

To access this map go to Australian Abattoirs – Google map interactive

History of Mackay meat processing facility

1890’s

Recognition that the export trade of meat needs to be developed for the economic benefit of Australian producers (Pg 1041).¹
- Existing low values are due to fact that half to one third of surplus meat is exported.¹
- Should be exporting 250,000 to 300,000 carcases of beef.¹
- £1M pounds is required to construct meatworks.¹
- If not constructed £10M pounds could be added to existing capital of the banks and still their securities would be unprofitable(Pg 1042).¹
Parliament develope “The Meat and Dairy Produce Encouragement Act”(Pg 1042).¹
- Levy imposed on both cattle and sheep.¹
- 2 funds .¹
  1. Dairying herds
  2. Beef herds
- Fund allows for establishment of meatworks at.¹
  - Pinkenba
  - Bowen
  - Redbank
  - Cardwell
  - Broadsound
  - Gladstone
  - Brisbane
  - Charleville
  - Mackay
  - Biboohra (Mareeba)
  - Burketown and
  - Sellheim

1905

Mackay abattoir inception.⁵⁶
Authors note – there is a significant discrepancy as to when this site was established.

1954

Beef Cattle in the district of Mackay totalled 268,809 head.¹⁵
Meeting is held to discuss possibility of establishment of an abattoir in Mackay.¹⁵
- If constructed must allow for extension to cope with increase in cattle export.¹⁵
Mackay Local Abattoir board applied for £5,000 debenture loan to build the facility.¹⁵
- Refused by 5 Insurance companies
- Refused by 2 banks and
- Public curator

1965

July. Mackay, Baker’s Creek works opens – Borthwicks.¹⁶

1980’s

The Australian beef trading/processing environment is worsening(Pg 119).⁵
- QLD Cattle herd in 1975 was 14M head.⁵
  - QLD Cattle herd in 1987 is 9M.⁵
- There is low utilisation rates through meatworks and the need to reduce the number the meatworks is seen to improve efficency and reduce operational costs (Pg 120).⁵

1983

Federal Industries Assistance Commission produce a report that reveals the Australian meat processing industry has 38% excess capacity (Pg 126).⁷

1986

April. Joint Venture Proposal is begun to amalgamate.⁷
- FJ Walkers (Owned by Elders IXL)
  - Already own 10 abattoirs, including 4 key export works and meat packing plants in Australia (Pg 119).⁵
- Metro Meat Industries
- Smorgon Consolidated Industries
- Tancred Bros
- Thomas Borthwick & Sons
  - Borthwicks to add their plants of Mackay and Bowen (QLD).⁷
Wide spread concern of potential domination of the QLD beef market by the merger entity (Pg 127).⁷
May. Trade Practices Commission (TPC) holds a investigation.⁷
June. TPC announce will not place legal impediment to the merger.⁷
July. Borthwicks withdraw from talks(pg 120).⁵
- Borthwicks had operation problems of it’s own and wanted to sell all Australian assets including hides and skin processing not just jewels of Bowen and Mackay.⁵
- Portland (Vic) would be particularly difficult to sell due to union unrest.⁵

1987

Is listed in Aus-Meat Accreditation List as Establisment #67.⁸
- Borthwick. T & Sons Ltd.

1988

January. Teys Brothers are in discussion with Borthwick to purchase Borthwick Australian assets and a Japanese branch of the company (Pg 121).⁵
Teys had been in a joint venture with Canada Packers (Pg 121).⁵
- Canada Packers withdrew from the joint venture which influenced Teys to seek financial backing from Kerry Packer in bidding for the Borthwick assets
- Purchase price $25M Australian
AMH saw the ‘new entrant’, Teys as a threat to AMH’s ability to remain profitable and achieve further rationalisation in the northern region (Pg 122).⁵
AMH commented that Borthwick operations were the main price competition in QLD (Pg 122).⁵
- If Borthwicks not in the market AMH would earn $10 a head more per animal.⁵
AMH offered Borthwicks $29M for Australian Assets (Pg 122)
TPC advised AMH not to proceed without their consultation as they would likely contravene Sec 50 Trade Practices Act and likely dominate the QLD cattle market (Pg 123).⁵
TPC placed an injunction for AMH to withdraw offer (Pg 123).⁵
- AMH resisted arguing the the order would likely allow Teys to purchase without actual determination of contravention of section 50.⁵
- AMH offered undertaking that Borthwicks business’s would be maintained and conducted independently and in competition with the business of AMH.⁵
- TPC accepted but possible divestiture order was of significant commercial risk to AMH.⁵
  - TPC announced an inquiry was to be held.⁵
- Borthwicks sale to AMH was accepted 26/01/1988
Borthwick Hides and skins business were immediately sold.⁵
All remaining parts of Borthwicks were combined with AMH
February. TPC begins inquiry.⁵
- TPC accepts that northern QLD is a seperate market to central and southern QLD.⁵
- AMH control 5 of the 10 abattoirs in the region.⁵
Bowen abattoir could lift total regional slaughter capacity to over 76.76%.⁵
TPC ruled AMH had contravened section 50.⁵
- Ruling was AMH must divest itself of Bowen & Mackay
  - Could retain control of Portland (pg 128).⁷
- 3 months to do so
- appeals and cross appeals conducted.
Trade Practices Commission forced sale due to AMH having dominant market share.²

March. TPC final judgement ruling on AMH case (Pg 123).⁵
- Case is held as precedent on what constitutes the geographical limits of a product market
While the court case was in process AMH had been operating the plants(Pg 123).⁵
- Profits from them had been above market expectations.⁵
- Bowen was of marginal importance
- Mackay was significant because of the access to lucrative Japanes market (Pg 128).⁷
AMH offered QLD plants to Anglo Irish $32M (Pg 124).⁵
- initially Anglo Irish accepted but revalued plants at considerably less and withdrew from the deal
TPC increased pressure on AMH to sell plants (pg 124).⁵
- If AMH didn’t sell them TPC would put plants up for public auction at market price
Nippon Meat Packers, in consortium with Mackay Sugar to purchase the Bowen and Mackay plants (Pg 123,86).⁵
- reported $32M

1997

July. Is listed at this point in time in Aus-Meat Accreditation Listing.⁹
- Beef Export Abattoir #67 Thomas Borthwick & Sons P/L
November. Nippon announce closure of the plant.¹⁷
- Loss of employment of 450 workers
government encourage company and unions to continue negotiations of a new EBA.¹⁷
- With government prepared to offer assistance package to facilitate new investment in the plant to bring up to world class standards if agreement is reached

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.⁵¹
- 27 have some level of foreign ownership.⁵¹
- Ownership dominated by Japan, UK and the US.⁵¹

1994

Nippon purchase (Pg 86).⁵ Wingham (NSW)
- Wingham is a major beef exports facility.⁵
- Tomen sells it’s interest to Nippon.⁵
  - Major shareholder in Anvic Meat Exports Pty Ltd.⁵

1995

Simon Stahl is appointed manager of the Mackay Plant⁵⁷
- previously worked at Oakey (QLD)⁵⁷

1997

Nippon has invested $200M in abattoirs and feedlots over the previous decade(Pg 86).⁵
- 3rd Largest meat processor in Australia.⁵
- Exporting to 34 countries.⁵

NH Foods holdings. Source www.nh-foods.com.au – General Information accessed 21/12/2015

2000

Seasonal closure date of works 20/12/2000.¹⁹

2001

Seasonal re-opening date of works 22/01/2001.¹⁹

2002

Mackay facility is currently operating.²⁰
- 5 days per week.²⁰
  - Day and Afternoon
  - Voluntary Saturdays
- Processing 1,020 head per day.²⁰

2003

February. Borthwicks fined $15,000 after 3 employees overcome by carbon monoxide gas in a chiller room.³⁷

2004

March. Borthwicks fined $40,000 for spilling 4 tonnes of tallow into Bakers Creek after a pumping tank overflowed.³⁷
May. Borthwicks fined $40,000 due to death of a trainee export buyer when a stack of frozen meat fell on him.³⁷
Paid $334,000 compensation to an employee who suffered permanent disability due to cabon monoxide incident.³⁷
July. Facility was shut down 12 hours and 350 employees evacuated due to ammonia spill.³⁷

2008

Is listed at this point in time in Aus-Meat Accreditation Listing.¹⁰
- Export Abattoir ( Beef Offal) A+
  - #67 Thomas Borthwick & Sons

2005

Rockhampton – Lakes Creek (QLD) receives $660,000 federal grant to re-open it’s meatworks under Regional partnerships program.²¹
- Rockhampton Lakes Creek had closed in 2002, 1,200 staff lost jobs.²¹
- Jointly owned by Teys Investments Pty Ltd and Consolidated Pastoral Company Pty Ltd (Kerry Packer).²¹
Neither Rockhampton (AMH) or Mackay (Nippon) received any finanical support.²¹
- Both sites are in direct competition with Rockhampton Lakes Creek.²¹
October. Mackay embarks on extensive recruitment drive locally but to practically no avail.²²
- workers have left to seek employment in the mining industry.²²
Mackay employs 20 Brazillian boners to replace local workers.²²
- 2 year working Visa, after which they can apply for Australian citizenship.²²
- Workers will receive $950 a week.²²
  - In Brazil they earned $200 a month, same work.²²
Borthwicks plan to import more Brazilian workers next year.²²
December. 2005 has seen a 50% turnover in the 500 plus staff at the plant.²³
Borthwicks will employ up to 50 Brazilians in 2006.²³
Mackay plant contributed to the Mackay economy in 2005.²³
- $17M in wages.²³
- Purchased 150,000 head of stock at cost of $135M.²³
  - Numbers down due to restricted supply of cattle due to drought and graziers holding cattle to rebuild herds

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

Plant seasonal closure 18/12/2005.²³

2006

Planned seasonal opening Mid January first shift.²³
- second shift in February
January. Plan to process 190,000 this year.²⁴
Processed 160,000 last year.²⁴
- 50 Brazilian staff employed
- some South African tradesmen due to start soon
New staff will allow production throughput to lift from 600 to more than 900 head a day.²⁴
- Staff numbers in total to almost 520
August. Up to 30 workers lost jobs due to short supplies of cattle.²⁵
- second boning shift has been suspended
Employees say had less than 25 minutes notice of their termination.²⁵
Staff cuts based on ‘last on, first off’ basis.²⁵
Australian workers saying they lost their jobs while imported workers kept theirs.²⁵
Production to drop from targets of 900 head to 650 head daily.²⁵
Shortage of cattle and workers has taken it’s toll.²⁵
To operate effectively the facility needs to hire an additional 140 people.²⁵
2 workers who had been on probation period loose their employment after consideration of their performance by the company.²⁶
- Was done in accordance with EBA
- Both offered work for the day and one to the end of the week

2007

August. 40 Brazilian workers on 457 Visa’s travelled to Rockhampton to meet with AMH for employment at the plant in Rockhampton.²⁷
- AMH recently been taken over by JBS Friboi
September. Federal Member from QLD, National Party, De-Anne Kelly says AMH Holdings is threatening the viability of smaller abattoirs by poaching their overseas workers.²⁸
- Claims 18 Brazilian workers left a local abattoir to work at Dinmore (QLD).
- Another 30 workers set to leave Mackay – Nippon Meat Packers
October. Meatworks will cut pockets off employee overalls and conduct random searches to prevent stealing of gallstones.²⁹

2008

January. Seasonal start up expected to begin 24/01/2008.³⁰
Anticpating a great year at the meatworks.³⁰
- Have had 4 years of struggling against drought and labour problems.³⁰
  - turnover of 35 staff every month.³⁰
- Borthwicks imported workers on ‘457 visas’ from Brazil, South Africa and the Cook Islands.³⁰
  - housed and looked after by the company.³⁰
- Another 40 Brazilians, as well as Ireland and South Africans with 50 locals would begin.³⁰
- Mining has shown a significant slowdown in job offers.³⁰
  - At the peak 600 mining jobs were advertised regularly now only 200.³⁰
- Existing 350 workforce will soon be joined by 100 more.³⁰
- Expect to process 150,000 head of cattle.³⁰
  - Increase of 10% on previous year.³⁰
“It’s been depressing for 4 years, If it weren’t for the fact we were foreign owned we would have had to close” Simon Stahl. Manager at Borthwicks.³⁰
Seasonal conditions had improved significantly in the area.³⁰
- southern regions were still drought stricken.³⁰

2008

June. Borthwicks meatworker is awarded $84,587 in damages for workplace injury.³¹
- Total damages award was $102,028.³¹
  - Work Cover received $17,441.³¹
July. Abattoir will be forced to close for 2 days due to a Truck strike that will affect cattle deliveries.³²
- Truck strike was due to concerns of increased registration costs, harsher penalties for working extra hours.³²
- lack of rest stops forced truck drivers to drive longer than they wanted.³²

2009

January. Seasonal opening 27/01/2009.³³
A Halal slaughterman is employed allowing the facility to sell beef to Islamic countries.³³
- lucrative market.³³
- more difficult to access than previous years due to protocols.³³
- Many Muslims around the world interested in Australian beef.³³
Expected to process 150,000 cattle through the year.³³
December. Borthwicks loose a Supreme Court appeal against a fine for a workplace accident.³⁴
- 2 accidents combined total of $114,000.³⁴

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

2010

October. Joint research is conducted using the abattoir waste solids in the pyrolysis process.³⁵
Waste to Energy. MLA project A.ENV.0101 March 2011
- solid waste streams from red meat processing are generally disposed of at cost by the abattoir.³⁵
- study was to look at ways the waste can be treated through anaerobic/aerobic biological treatment and improving management practices, reducing disposal costs and minimising fossile fuel consumption.³⁵
- Ways for the abattoir to produce their own renewable energy.³⁵

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.⁵²
- affected slaughter numbers to abattoirs.⁵²
June. Injured foreign meatworker lodges compensation claim Borthwicks $740,000.³⁶
- Began work at facility February 2006 earning $807 a week.³⁶
- Worked until Mid August 2009, then placed on light duties until early 2010.³⁶
  - Employment was terminated due to injuries.³⁶
- Claims that not enough staff or rest breaks are provided.³⁶
- Typical work day.³⁶
  - Start 6am
  - Take a 7 minute break at 7.20am
  - 20 minute break at 8.30am
  - 7 minute break 10.15am
  - 30 minutes for lunch at 11.15am
  - 7 minute break at 12.45pm
  - 10 minutes at 1.50pm
  - Finish at 2.45pm.
July. Borthwicks found guiltyof failing to discharge workplace health and safety obligations for incident that had occured 8/10/2007 when a meatworker had been trapped between a metal beam and shelving.³⁷
September. Borthwicks finsed $70,000 for trapped foot incident.³⁸
- Borthwicks had provided training to the worker and had safety measures in place that had not been disregarded by Borthwicks.³⁸
- Finding was based on Borthwicks failing risk management.³⁸

2012

Currently processing 750 head a day.²
January. Mackay meatworks seasonal opening about 24/01/2012.³⁹
Manager. Simon Stahl leaves and is appointed CEO of NCMC at Casino⁵⁷
November. Australia’s negotiations with Korean beef export market need to be finalised.⁴⁰
- Korean Beef trade is worth $770M.⁴⁰
- Delays have stalled with Gillard insistance that an Investor state dispute settlement (ISDS) mechanism in the agreement be excluded.⁴⁰
- Korea is Australia’s 3rd largest beef export market.⁴⁰
  - 2011 146,347 tonnes
  - 15% of Australia’s global beef exports
  - Currently 49% of Korean beef imports
- Delays in FTA are causing high costs to processors.⁴⁰
Australia’s market position would decline dramatically in 2013 to Korea if the EFT is not finalised soon.⁴⁰
- US beef has significant advantages over Australia.⁴⁰
  - January 2015 will seee US gain a 5.3% tariff advantage
    - Australian been incures 40% tariff to Korea
  - Tariff widens 2.66% each January
    - US entering Korea Tariff free 2026
- If the FTA is not finalised with similar tariff to US markets.⁴⁰
  - Australia will incur cumulative loss A$1.4B over 15 years
  - Australia’s share of Korean market falling from current 49% to 26% in 2026.

Nippon Meat Packers Revenue Source IBIS world 2010,2013

Nippon Meat Packers Profit Earnings Source IBIS world 2010,2013

2013

Mackay abattoir throughput of meat.⁴¹
- 90% exported
- 10% for domestic sales
Distribution of beef enterprises in the Mackay Whitsunday region is 80% coastal and 20% hinterland.⁴¹
- Many producers combine sugarcane and pasture improvment with cattle production or fattening

2014

Nippon Meat Packers Pty Ltd changes name to NH Foods.⁵⁵
NH Foods Australia Logo Source www.nh-foods.com.au

April Frozen beef shipments to Russia are temporarily suspended from 07/04/2014.⁴⁴
- A similar suspension occurred 31/03/2014 for chilled beef.⁴⁴
- Temporary suspension of beef offal imports occurred 27/01/2014.⁴⁴

Wingham exports meat to Russia affected, along with another 29 Australian establishments.⁴⁴
- Australia placed additional requirements on its testing requirements.⁴⁴
- Russia detected Trenbolone 21/03/2014.⁴⁴
- Australian authorities held an immediate meeting with Russian counterparts.⁴⁴
  - providing details of testing and invited Russia to inspect Australian meat establishments.⁴⁴
  - Trenbolone is not produced from cattle treated with HGP’s.⁴⁴
  - Russia has a zero tolerance, most countries have a maximum residue limit.⁴⁴
Russia placed new requirements of detection of Trenbolone.⁴⁴

Russia may consider Asia, Chinese port and Indian buffalo meat imports to replace decrease is supplies from the US, European union and Australia.⁴⁴
Australia has been a traditional beef exporter to Russia since the 1970’s.⁴⁴
- To July 2012 – June 2013 exported 24,000 tonnes
- To July 2013 – February 2014 20,000t
- Trade is worth more than $170M a year
- Russia is a declining market for Australian beef exports
- Calendar year to date Russia taken only 1,221t beef
- Full year exports 2010 and 2011 topped 60,000 tonnes
Tropical cyclone Ita hits far north QLD coast.

Tropcial Cyclone Ita impacts QLD April 2014 www.longpaddock.qld.gov.au

May. Mackay region producers are fairing better with climate conditions than Western QLD.⁴²
- Drought a significant factor in many areas of QLD

Other factors affecting producers are.⁴²
- high Australian dollar
- rising debts
- surplus of cattle due to halting of live export with Indonesia in 2011
July. Australia is on the verge of finalising a FTA with Japan.⁴³
- 97% of exporters set to get preferential treatment or be duty free
- Japan’s standard 38.5% tariff on frozen beef will be cut to 19.5%
- Fresh beef exports tariff will drop to 23.5% over the next 15 years
- Beef Offal, worth $167M will also have reduced tariff and increased quota
December. Korea-Australia Free trade agreement enters into force 12/12/2014.⁵⁰
- Initially an immediate cut to some tariffs with a further cut 01/01/2015.⁵⁰

2015

January. MLA forecast.⁵³
- Australian cattle herd has gone from 35 year high (2013) to 20 year low (2015).⁵³
  - Australian cattle herd slip to 26.8M head by June 2015
  - by 2016 expected decline to 26.5M head
  - by 2020 27.9M head
- Adult cattle slaughter expected to slump 15% year on year.⁵³
  - 2015 to 7.8M head
  - 2020 expected 7.9M slaughter
  - Long term Female average in 2014 52%
    - Normally female kill percentage 47%
      - Only in years 1977, 1998 & 2003 has female kill been above 50%
- Beef exports record levels in 2014 1.39M tonnes shipped weight.⁵³
  - Expected to drop 20% to 1.3M tonnes in 2015

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

March. Foreign ownership in Australian red meat processing.

Share of Australian red meat processing

Source The Stock Standard. VFF March 2015

April. FK Gardiner & Sons plan to build an abattoir, Darling Downs, Toowoomba.⁴⁶

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

December. Currently listed in Aus-Meat Accreditation Listing
- #67 Thomas Borthwick & Sons Pty Ltd Export Abattoir (Beef Offal) A+.¹¹
Mackay abattoir has a current listing as EUCAS accredited abattoir.¹²
Export markets of Borthwick’s include Japan, USA, Republic of Korea, South Africa, Russia, Europe, Taiwan, Canada, Mexico, Ukraine, Indonesia.¹³
Plant is Halal certified.¹³
Current processing in excess of 750 cattle per day.¹³
Plant closed 10 days earlier than usual for seasonal break.⁴⁸
December. Mackay plant expects it will have to compete hard for cattle in 2016.⁴⁸
- Industry has been slaughtering cattle at record rates for the past 3 years.⁴⁸
  - inevitable a shortage would arrive
- Current El Nino cycle is creating fear that the rainfall will be reduced in the upcoming wet season.⁴⁸
  - some graziers are destocking

American Trim market dropped significantly the last few months.⁴⁸
- some processors going into the red
Predicts Asian markets opportunities will emerge.⁴⁸
- more value add on products
- Meatworks will look to expand to enable ability to use more of the carcase
- will see every harvestable portion of organs to be packed

December. ATO publishes tax data for agribusiness corporates.⁵⁴
- 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.⁵⁴
- Income tax information is for 2013/14.⁵⁴
NH Foods produced Total Income $845,824.273.⁵⁴
- Nil taxable income and nil tax payable.⁵⁴

2016

January. KAFTA third round of tariff cuts occur 01/01/2016.⁴⁹
- Fresh, chilled and frozen beef has a current tariff 34.6%.⁴⁹
  - Will reduce to 32%
  - Original level was 40%
  - Meat export is worth $A1.07B in 2014/15
  - Korea has always been one of biggest meat export markets
    - Shipments for lamb have increased 35%

Sources of Mackay Abattoir

Share this: