Alliance doubles North Island sheep capacity

The Alliance Group has doubled its North Island sheep processing capacity with the purchase of a lamb, sheep and beef processing plant Levin Meats.

The Invercargill co-operative already owns a sheep processing plant in Dannevirke, but chief executive Grant Cuff said the second plant would shore up supply and allow it to extend its out-of-season lamb processing while also expanding in to beef processing.

Certainty and quality of supply, especially for chilled lamb, enhanced annual promotional programmes, consumer awareness, product development and brand positioning, he said.

The plant can process up to 750,000 lambs and about 40,000 cattle a year, and Alliance had no immediate plans to increase that capacity.

The purchase would also allow Alliance to shore up supplies of lamb and sheep at a time when numbers were falling, but Mr Cuff said some of that had been caused by drought in the North Island, and they should recover.

"We have got customers who want product and they want it all year round. We can grow lambs out of season more easily in the North Island than we can in the south of the South Island."

Mr Cuff said Alliance would take ownership of the plant on November 6 and did not plan to make any immediate changes.

Alliance chairman Owen Poole said the company had been evaluating plants to buy for some time, but this was the first to meet its criteria.

Part of that criteria was to pursue growth and industry consolidation to match farmer support and market demand.

This purchase reduced the number of operators in the meat industry, he said, contributing to the generally agreed goal of industry consolidation.

Levin Meats was privately owned by Hawkes Bay farmers the Grieve family.

In the past few years, $500,000 was spent upgrading the plant to European Union and North American standards.