Joint venture creates major meat operator

Press, 12 February 1986, Page 37

Joint venture creates major meat operator

p Wellington A new partnership has been formed in the meat industry, combining the meat interests of Crown Corporation, Ltd, and a major portion of the New Zealand meat processing and trading interests of Union International, Ltd, PLC, of London. The arrangement is subject to Commerce Commission approval. The new company, Weddel Crown Corporation, Ltd, with 10 sheep and lamb chains, calf processing and a large beef throughput, will be the largest operator in the North Island meat-pro-cessing and exporting business and one of the largest in New Zealand. It will employ 2000 people on a permanent basis, with a seasonal employment peak of about 5000, and it will operate three freezing works. The formation of the new company was announced jointly by Lord

Vestey, who is in New Zealand, and Sir Roderick Weir. Weddel Crown will have a board of six directors: Messrs Peter Johnston (executive chairman, who is managing director of W. and R. Fletcher, NZ), Spencer Hagen (managing director, who is managing director of the Crown Corporation meat-processing and trading subsidiary, Aotearoa Meats), John Prendergast (financial director of W. and R. Fletcher), and Bill Steele (chairman of Cable Price Downer), Sir Roderick Weir (chairman of Crown Corporation), and Lord Vestey (chairman of Union International). Weddel Crown will have a paid up capital of SBOM, subscribed Crown Corporation and by the Union group interests. While the new company will include the bulk of each partners’ interest in meat processing and marketing, each will maintain widely diversified interests in

finance, agricultural machinery, tanning and canning. Sir Roderick Weir said: “The new company represents a further step towards Crown’s objective of extending its interests in the meat industry. The move represents a very sensible rationalisation of our existing operations with those of a well-estab-lished company with a huge international meat trading infrastructure.” Weddel Crown’s three freezing works will be: Westfield (Auckland), Tomoana (Hastings), and Aotearoa (Cambridge). The company will also have significant interests in meat wholesaling and retailing in New Zealand, and in further processing for specialist international markets. .• All three works are capable of producing chilled meat cuts — an area both groups and the meat industry as a whole view as having good growth potential.

The United Kingdom organisation gives Crown access to a huge number of butcher retail outlets.

Lord Vesty and Sir Roderick believe the new enterprise will complement the areas each is lacking — Crown’s overseas market access and Union’s stock procurement. Sir Roderick said that Crown regarded the downturn in farming as a “hiccup” and recognised the industry as one with peaks and hollows. “Sure it’s correct that we would make a better return on capital right now to invest it all in, say, Government stock at 20 per cent but we have a long and profitable association with agriculture, we know the business and we are totally confident. “Not in one or six months, but over time we are confident this will be a very good move,” he said.