Joint Venture For Silver Fern Farms

By Products Joint Venture For Silver Fern Farms

Silver Fern Farms, New Zealand’s leading marketer and exporter of red meat and associated products, and Modena Investments (New Zealand) Limited have formed a joint venture company, Farm Brands Limited (FBL), to undertake the purchasing, production and marketing of meal and tallow.

Modena Investments (New Zealand) is owned by Landmark (New Zealand) Limited, a domestic tallow trading company and Societa Azionaria Prodotti Industrali S.p.A (SAPI), an Italian renderer with operations in Europe and commercial agreements in South America.

FBL will establish new rendering facilities for the production of meal and tallow. New Zealand currently produces around 150,000 tonnes of meal and 120,000 tonnes of tallow annually, of which about 75 percent and 90 percent is exported respectively. Budgeted sales by FBL would initially be valued at about $70m.

Higher grade meal, or ovine, is used primarily in the US and EU pet food markets while the remainder, mixed meal, is used for poultry feed. Tallow is primarily exported to Asia for use in soap manufacture.

Keith Cooper, Silver Fern Farms Chief Executive, says the agreement fits with the company’s ongoing strategy of improving processing efficiencies and marketing price gains, ensuring added value to supplier partners and customers by way of joint venture initiatives and becoming a truly international marketing company with specialist partners. “As an international exporter, SAPI represents an ideal partner, offering technology, processing and global marketing expertise. An initiative of this nature will ensure we make the most of market opportunities, while providing a vehicle to aggregate raw material volumes to consolidate marketing strategies.”

Carlo Alberto Rinaldi, President of SAPI says the venture is in line with the company’s long-term strategy of ensuring international supply against declining EU production, while securing low risk raw material in anticipation of increased food safety regulations affecting BSE-affected countries. “There is every reason to believe also that New Zealand will eventually follow the international trend of requiring rendered material to be processed outside of food sites.”

Mr Cooper says the joint venture would have no immediate impact on Silver Fern Farms’ operational staffing requirements. Hugh Spence, of Landmark, has been appointed Chief Executive Officer of FBL and Richard Somerville, an independent director of Silver Fern Farms, as its Chairman.

ENDS

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