Southern expansion as Affco considers new plant in Invercargill

By LIAM DANN


The shake-up of the meat industry took another twist yesterday as Waikato-based Affco revealed it may build a new processing plant in Invercargill.

Affco has agreed in principle to buy a controlling stake in South Pacific Meats from Talleys Fisheries. South Pacific Meats is a meat exporting company 100 per cent owned by Talleys. Talleys is the largest shareholder in Affco with a stake of nearly 40 per cent.

The big appeal of South Pacific Meats for Affco is that it owns ideal land and holds the relevant consents for a new freezing works.

Any Affco moves into the South Island will further increase competition between meat companies which are rapidly moving out of their regional strongholds.

Invercargill-based Alliance moved into the North Island this year, opening a processing plant in Dannevirke.

Affco chairman Sam Lewis said the strategic South Island move was inevitable given that all the big southern companies now had interests in the North Island.

Dunedin-based PPCS holds a majority stake in Hawkes Bay-based Richmond and Canterbury Meat Packers last week bought a Richmond processing plant in Marton.

If anything, there was more scope for expansion in the south, Lewis said.

"If you look at the numbers down there, there are more lambs than anywhere in New Zealand," he said.

Affco has not yet committed to building the new plant.

Management was looking into the viability. If the project did get the go-ahead things would happen quickly, he said.

He would not reveal the purchase price.