Silver Fern Farms (SFF) was at the tail-end of a two-year mission for fresh capital which ultimately saw China's Shanghai Maling take a 50 per cent share in the business in return for a $261m capital injection.
While the deal was agreed in September 2015, delays in getting it through the Overseas Investment Office and signed off by Cabinet Ministers meant it was last December before the cash finally landed in SFF's bank account.
That was enough time for it to chalk up another heavy loss of $30.6m for the 2015/16 year.
The loss had been signalled by management and deftly squashed suggestions the meat company could struggle on under its own steam.
Hamilton - who was formerly an Australasian executive at Deutsche Bank - replaced long-serving chief executive Keith Cooper in late 2014 as the hunt for new equity took on life-or-death proportions for the cooperative.
Now he faces an altogether different challenge of capitalising on SFF's new-found position as the industry's financially strongest player. The company has no term debt and $90m cash on its balance sheet.
Hamilton's immediate priority has been to tackle over-capacity: SFF has too many meat plants and too few livestock to keep them all running profitably.
While SFF had earlier closed several small plants, it lacked the financial wherewithal to take out a major plant. With Shanghai Maling's cash safely banked, Hamilton announced in May that the doors at its Fairton plant in Ashburton would close at the end of the current season.
The Ashburton plant is the victim of a tide of dairy conversions in its mid-Canterbury catchment. It processed a million lambs as recently as four years ago. But just 300,000 last season. Redundancies alone for the 370 workers are expected to cost $10 million. "Previously we did not have the financial capability to do that," said Hamilton.
Asked whether further closures were likely, he confirmed SFF was done for this season at least. Beyond that it would depend on whether the national export lamb crop stabilised at its current level of 19 million.
A bounceback in overseas markets in the current season meant the profitability gap between sheep meat returns and dairy had closed. Consequently there was confidence sheep numbers had finally troughed. Says Hamilton, "If you think that is a steady state then we are relatively close to where we want processing capacity to be."
After years of under-spending SFF is now upping its expenditure on plants. Recurring annual expenditure of $20m will go towards labour-saving robotics, upgrading waste disposal and power efficiency projects. New spending will increase plant efficiency and profit margins.
Getting on top of deferred maintenance and over-capacity is only part of the picture.
In recent years SFF has embarked on a branded retail strategy to maximise pricing for its highest quality cuts. Emblazoned with its distinctive black livery the consumer-ready packs have become a familiar sight in NZ supermarket aisles.
Hamilton says a stronger balance sheet sets up the strategy - run on a shoe-string budget till now - to be rolled out internationally. "To be relevant we need to try and globalise it because NZ is only 10 per cent of sales. It is not big enough to be material."
In March 2016, Silver Fern Farms launched its retail packs in 1000 supermarkets in Germany. The United States and China will follow next year.
The strategy is resource intensive and a departure from traditional distributor relationships. In Germany alone, SFF has employed a sales force of a dozen people. Hamilton says the company expects to incur losses while it builds its brand with retailers and consumers. "You have overheads before you have got sales without the new capital and therefore the financial flexibility we couldn't have done that."
The pilot markets have traditionally high red meat consumption, an identified market segment willing to pay premium prices, and, scale.
Along with the rest of the industry China's importance has grown exponentially for SFF but mainly for lower value cuts.
It is now working with Shanghai Maling to develop a range of higher-end products to crack the Chinese retail market. "We had a go three years ago but it was arguable whether we had the right distributor or the right product range."
While SFF will tap into Shanghai Maling's 800 Chinese supermarkets and retail outlets, it will be free to sell to other retailers. "Some of the high-end ones which we really want to be targeting, they don't own. It is a matter of getting into the right stores." The recent green light for the limited trial of NZ chilled meat to China is a further boost.
Usefully for SFF, Shanghai Maling has one of the few chilled distribution chains in China, with 19 wholesale facilities in Shanghai and other provinces.
Some top-end Chinese hotel and restaurant customers already pay more for SFF's highest quality beef cuts in a frozen state than the Middle East and the US will pay for the same cuts chilled.
Hamilton expects the frozen prices to ease once chilled is established but the message is clear.
"At the moment they do not have a choice. But it does show there is clearly a premium red meat segment in China."
