Wallace says its buy-out saved Coromandel plant

By PHILIPPA STEVENSON

Wallace Corporation says it has saved Thames' struggling Coromandel Meat Processors from closure by buying it.

Managing director James Wallace said his company would begin operating the plant tomorrow, only a week after sealing the deal, under an "accelerated" settlement with Coromandel Meat's owners, Masterpiece Holdings.

A consortium of North Island meat companies had tried to buy Coromandel Meat, a major Thames employer, with the aim of closing it to reduce competition, he said.

The Commerce Commission said yesterday it had received a complaint about the buy-and-close attempt.

The Business Herald understands the consortium was made up of Richmond, Affco and Wilson Hellaby, the latter two joint owners of Auckland Meat Processors.

Affco executive chairman Sam Lewis and Richmond chief executive John Loughlin were said to be spearheading the move because of over-capacity in killing space.

Richmond chief executive John Loughlin declined to comment "on what we might have been doing".

"We are happy to have it owned by James. There is no concern from Richmond's end about that at all," he said.

Although over-capacity was an issue for the industry it was also desirable to get the capacity into fewer hands. "James has achieved that at no cost for us. So it is a very good outcome," Mr Loughlin said.

Mr Wallace rejected that over-capacity was an industry problem and said all companies should be looking at what more they could do.

"We have our niches and keep making money. We have rendering to keep us going through the winter," he said.

Mr Wallace declined to say what was paid for the plant but said the other companies' interest had forced up the price.

However, he said he expected to spend up to $2 million on a major upgrade, including getting it to European Union standards for sheep, involving a new lamb-boning room.

The plant employs around 130 staff slaughtering sheep, goats, pigs and beef. Mr Wallace said there were synergies between the Thames works and Wallace Corporation's other plant at Waitoa.

The purchase again gave the company the ability to slaughter sheep, which it lost when its Piriaka, Taumarunui, plant was destroyed by fire in February last year.

It would also give Wallace greater beef capacity, cold-boning facilities and provide better hides for its leather division.

Masterpiece Holdings was registered in 1932 and is owned by 24 mainly Auckland and Thames shareholders, including chairman Lomond Seel. Its directors include Rod Slater, head of the Beef and Lamb Marketing Bureau, and managing director Andy Tomlinson.

Company Office records show Wallace Corporation had a debenture over the company in 1997.

Mr Tomlinson, who will leave the plant after 15 years, said he was pleased the business would carry on and staff would keep their jobs.

"We're happy we've negotiated this deal, that the [Coromandel] brand continues and that the farmers continue to have access to a locally operated plant."

Thames Coromandel Mayor Chris Lux, a farmer, said there was relief and excitement over the deal.