Farmer group pays $4m to give plant new chance

Four Hawkes Bay farmers have paid $4 million for the Levin meatworks of collapsed meat company Lakeview Farm Fresh.

The leader of the group, Ivan Grieve, of Poukawa, said the farmers planned to spend $1 million refurbishing the plant to meet European Union meat import standards.

It already had a licence for export to the United States.

Grieve, the half-owner of Napier meat company Fresh Meats, said the new owners would take over the Levin plant on January 6.

Receiver David Petterson on Monday told the 120 staff remaining at the plant their jobs were safe. When Lakeview went into receivership owing $11.5 million in April, the Levin meatworks employed 250 people.

It slaughters lambs for export and cattle and pigs for the domestic market up to 10 hours a day, five days a week, and has an annual payroll of $4 million.

But Petterson told the Hawkes Bay farmers the plant's potential would be enhanced by investing further to bring the plant up to European Union requirements.



This led them to widen their due diligence to explore not only what they were buying and how they were going to manage it, but how they were going to capitalise it in the future.

Petterson said that if he had simply taken the money for continuation of a domestic meatworks, it was possible it would have run for another 12 months and then failed again.

Petterson said he had gone to a lot of trouble during the receivership to turn the business around, and would stay on for a year to manage it.

He has already sold Lakeview's Dannevirke abattoir to the South Island-based Alliance Group for $850,000.

Alliance plans a multimillion-dollar upgrade of that plant, 55km northeast of Palmerston North, to increase its capacity to a million lambs a year, and to make Alliance the only national sheep and beef meat processor.

Alliance is understood to have outbid an Australian company for the Dannevirke plant, and the underbidder for the Levin plant is understood to have been other North Island meat companies which wanted to close the plant to reduce competition for livestock procurement.

Petterson has previously said the sale of Lakeview's plants is expected to return between 65c and 85c in the dollar to creditors.

Debts included $6 million owed to ANZ Bank, $670,000 to preferential creditors such as staff for holiday pay, $2.4 million to farmer suppliers and $1.9 million to trade creditors.

Grieve said the farmer consortium had spent in the vicinity of $4 million buying the works, and expected a "tidy-up" required to meet EU standards would cost about $1 million and take four months.

- NZPA