Australian Abattoirs

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

• Bindareebeef currently in operation as at 2018
• Contact for employment opportunities Bindaree Beef Employment

Location   

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

Hema 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 Family^61.

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
  • Employment contact – humanresources@bindareebeef.com.au
• 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
  • abattoirs are outdated and inefficent¹
  • Long awaited restructuring of the state’s meat processing sector needs to occur and has begun¹
  • Beef export abattoirs at Wingham (NSW), Mudgee (NSW), Gunnedah (NSW) and Inverell (NSW) are most at risk to close¹
  • Small number of modernised plants likely to survive restructuring Young (NSW), Cootamundra (NSW), Gundagai (NSW), Culcairn (NSW), Harden (NSW)¹
  • Handful of efficient and niche market operators insulated from fall out Casino (NSW), Macksville (NSW), Scone (NSW) and Lismore (NSW)¹
  • New privately owned and speciality sheep plants such as Goulburn (NSW) and Dubbo (NSW) killing 60% of NSW mutton are examples of what can be achieved by investment in capital¹
  • Increased US beef into previous Australian market share in Japan, Korea and Taiwan increased pressure¹
  • Live export of 500,000 cattle to Indonesia and Philippines increased pressure on operations of abattoirs¹

  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.

• Source – 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 2001^50.
  •  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

• Process of Slaughtering Cattle in an Abattoir – Bindaree Beef

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

Source – Bindaree Beef Preliminary environment Assessment – Rendering plant and biodigester plant.

The current abattoir meat processing facility showing the current lagoons

Source – 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

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

Source http://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

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.
  • Chinese trade for chilled beef exports is limited to 10 facilities in Australia based on prior performance with a 6 month trial period⁵⁵
    • 3 Teys Australia.
      • Beenleigh #294. NSW
      • Rockhampton #7. QLD
      • Wagga Wagga #291. NSW
    • JBS. Dinmore #235. QLD
    • Kilcoy Pastoral Co Kilcoy #640. QLD
    • G & K O’Connor. Pakenham #1265. Vic
    • Northern Co-operative Meat Co. Casino #239 NSW
    • John Dee. Warwick #243. QLD
  • Chinese trade has significantly excluded some facilities⁵⁵.
    • Nippon meat packers. Oakey #558. QLD
  • Chinese deal involves packing of Australian beef in Chinese language with MSA grading characteristics⁵⁶
• 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
• Bindaree agree to a 3 year Beef Supply deal with a customer Chinatex⁶⁴
  • Involves processing 900 head of cattle per week for export to China⁶⁴
  • Chinatex were to bear risk of rising cattle prices⁶⁴
  • Chinatex were warned that cattle prices were likely to rise, and there would be highs and lows over the contract period⁶⁴
  • Chinatex had done smaller frozen beef deals out of Australia in 2014 that had been profitable due to low cattle and meat prices at that time⁶⁴
  • Chinatex contract has no connection to the Shandong Delisi group merger or Quigdao meat processing facility discussions that occurred later in 2016⁶⁴.
• 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.
  • Dept Ag. Submission to Market consolidation and the red meat processing sector July 2015

Capacity of Major beef abattoirs in NSW. Page 15.

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

2012 NLIS Cattle Movements to abattoirs. Pg 25

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 customers^51.
    • Is the largest pure-play pork processor in the worlds⁵¹ largest pork-consuming country⁵¹
• Beef deal with Chinatex is under pressure. Benchmark Eastern Young Cattle Indicator (EYCI) having lifted from 416c/kg in March to 596c/kg in September⁶⁴.
  • Rise of EYCI of 43% in 6 months⁶⁴
• 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

• May. Chinatex default on 3 year supply agreement set up in early 2015⁶⁵
• June 30. Deadline for contract agreement Delisi Group⁶⁰.
• Bindaree Beef reduce casual employee numbers by around 100 personal⁶⁰.
• Bindaree begin court action to pursue payment of contract with Chinatex⁶⁵
• 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 Mau^61.
  • Primary business interests are in property development in Asia controlling businesses on Shanghai and Hong Kong stock exchanges^61.
  • Also hold some property in Western Australia⁶¹
    • Archstone established Consolidated Australian Pastoral Holdings (CAPH)^62.
      • Moola Bulla station, Shamrock station^62.
      • WA properties will be more geared to live export^62.
  • Intention to make further acquisitions of cattle properties in the Inverell area⁶¹.
  • AMIEU claim Hui Wang Mau paid $150M for 51% stake in Bindaree beef operation⁶⁹.
• 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 shortage^61.
• 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.
• November. Supreme Court order a Chinese business, Chinatex to pay Bindaree  $31.35M as compensation for reneging on a beef deal struck in 2015⁶⁴.
  • Chinese customer – Chinatex⁶⁴
  • 3 year supply deal had been to process about 900 head of cattle per week for export to China, with the meat sold through it’s own contacts⁶⁴
    • Chinatex had been warned of cattle price pressures at the time of the contract signing in 2015
    • Chinatex’s representative Zhiuhua Liang feared Chinatex’s own customers would leave and requested help to hide losses⁶⁴
      • Mr Liang didn’t want head company at Beijing to know of losses⁶⁴
      • Bindaree continued to purchase and slaughter cattle for Chinatex in line with the contract⁶⁴
  • Bindaree found other customers for some of Chinatex’s product, with Chinatex buying some⁶⁴
  • Chinatex has recently been brought out by Chinese state-owned behemoth China National Cereals, Oils and Foodstuffs Corp. (COFCO)^64.
    • It would not be a good look for COFCO to walk away from a court order covering a company it owned⁶⁴
  • Bindaree apply and receive a court appointed freezing order against Chinatex Australia⁶⁵
  • Chinatex write a response to Fairfax media claiming that Bindaree are using unfair pressure on a foreign company to reach their purpose through political means⁶⁶
    • Chinatex claim that Bindaree beef didn’t suffer any actual loss from the deal as they sold the product to other customers⁶⁶.

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.

• March. Bindaree returns to court after November 2017 ruling pursuing payment by Chinatex’s parent company COFCO⁶⁵
  • Federal Senate, National Senator John Williams says the matter greatly concerns him⁶⁵
  • “It is an example of an overseas-owned company that appears to be making every attempt to defy an Australian court judgement, which in turn would have a severe impact on a large Australian employer” Se John Williams⁶⁵.
  • COFCO have stripped Chinatex of their assets⁶⁵
    • Chinatex Australia transferred its shares, $38M from Australian subsidiary cattle Unibale Pty Ltd to related party Chinatex Fortune, a Hong Kong based company⁶⁵
    • Bindaree had successfully obtained a freezing order against Chinatex since December 2017⁶⁵
  • June. Chinatex enter Voluntary Administration on 22/06/2018⁶⁷.
    • Administrators – Grant Thornton.⁶⁷
    • Claims against the company amount to $115M. Including Bindaree debt⁶⁷
    • Estimations of Bindaree’s likely hood to receive fund are from 0% to 20% likely (Pg 11)⁶⁷
• October. Bindaree release a new premium beef brand⁶⁸.

‘Bindaree launches all-new premium beef brand’ www.farmonline.com.au 23.10.2018

• Research conducted by Bindaree  lead to development of range that is MSA graded for consistency⁶⁸
• October 24. A workers strike occurs after months of negotiations and meetings fails to reach agreement on a wages dispute⁶⁹.
  • Fair work Commission recent Award review require a 2% increase as absolute minimum on wages⁶⁹.
    • Bindaree claim its workers are already receiving above award wages and wish to only pay the 2% increase⁶⁹.
    • AMIEU want more than the 2% increase⁶⁹.
• Bindaree Beef agree to pay only the minimum increase required by Fair Works Commission recent Award review⁷⁰
• October 27. Another strike for 2 half hours by workers  is to occur, with the evening shift workers also striking⁷⁰.
  • AMIEU want 3% after the 2% increase⁷⁰.
    • Believe Bindaree can afford it because its part owner Hui Wing Mau has a net worth of $7.2B⁶⁹
    • AMIEU claim Bindaree Beef is profitable and can afford it while its workers are struggling to meet living costs⁷⁰
    • Award wage is minimum of $803 per week⁷⁰
      • Boner’s are paid $1,500 to $1,800 per week⁷⁰.
      • Unskilled workers already receiving 50% above award wage⁶⁰
      • AMIEU claim only 5% of workers earn above the minimum wage⁷⁰.
• Bindaree has currently been processing stock 5 days a week⁷⁰.
  • Has been able to increase wages in the past due to improvements in efficiency and equipment⁷⁰.
  • Current supply of stock is reducing due to severe drought across Eastern Australia⁷⁰.
    • East coast processors are forecast to drop production in the immediate future due to drought and supply pressure⁷⁰
    • Farmers are not able to plant crops due to current drought and have not been profitable recently, they are not sympathetic to meatworkers asking for higher pay rises when economically things are so unstable.⁷⁰
    • Workers demands are adding to the unrest in the region due to drought pressures⁷⁰.
    • Abattoir in Tasmania has already closed  due to high energy costs and lack of support for supply and funding⁷⁰
      • Devonport (Tas) , owned by JBS was promised $800,000 2 years in government funding to remain open. It has received some of that funding but will close 15/11/2019⁷¹
• The following charts were adapted from the Analysis of Regulatory and Related costs in Red Meat Processing. AMPC. SG Heilbron. Oct 2018.
  • This project identified and quantified the costs of red meat processing, including assessing the regulatory components. It compared costs with key international competitors in United States, Brazil and Argentina⁷².
  • Information was assessed from 29 facilities representing the national slaughter of 60% cattle and 35%⁷².

Key Cost Components Australian Cattle 2015/ 2016. 100% costs excluding Livestock purchase

Weighted Average Processing Costs. Key cost components were assessed based on per head of throughput ratio

Comparison of Operating costs with major competitors, US, Brazil and Argentina.

Sources. Inverell. Est # 218. NSW

1. ‘5,000 jobs at risk:Abattoirs facing closure’ Sydney Morning Herald 21.05.1996
2. http://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’ http://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’ http://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’ http://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’ http://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.
    • ‘Australia joins other countries in banning endosulfen’ www.smh.com.au 13.10.2010
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’ http://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
64. ‘Bindaree’s Chines partner ‘lacked moral compass’, court says in $31M judgement’ Beef Central 27.01.2017
65. ‘Bindaree’s Chinese business partner slammed in Senate over avoiding debt’ Beef Central 23.03.2018.
66. ‘Failed China beef deal turns political’ www.farmonline.com.au. 26.03.2018
67. Chinatex Voluntary Administration. Grant Thornton. 22.06.2018.
68. ‘Bindaree launches all-new premium beef brand’ www.farmonline.com.au 23.10.2018
69. ‘Bindaree Beef workers to walk out after billionaire boss refuses to budge’ AMIEU. Newcastle. 22.10.2018.
70. ‘Bindaree pay dispute’ ABC Rural radio. 27.10.2018
71. ‘Devonport closure puts more than 100 people out of work’ ABC News 22.10.2019.
72. Analysis of Regulatory and Related costs in Red Meat Processing. AMPC. SG Heilbron. Oct 2018