Plans unveiled for Welsh plant

Hawke's Bay-based Progressive Meats company is expecting the purchase of a meat processing plant in Wales to grow its New Zealand operation.

Managing director Craig Hickson said in April he took full ownership of the Cig Calon Cymru company, north-west of Cardiff, primarily to educate himself.

"It is part of wanting to be better informed as to how the meat channels and distributions work in that country and to better understand the causal factors between the price differentials that local product sells for and New Zealand's product and see if we can close the gap," he said.

There were other ways to find out about the industry but he said they were possibly superficial and "a slice in time".

"You really get to understand what it's about when you are involved."

Mr Hickson, the 2012 Allflex/Federated Farmers Agribusiness Person of the Year, said it was an idea he had held for many years and "took the plunge" in February last year with a part share. In April this year he took full ownership and had appointed a senior manager.

He visits the plant twice a year and said the plan was to expand the business.

"It is a very small company. It primarily does beef and a small lamb line but it has potential to grow, subject to demand for the product and services of the facility. It is early days - we are working through an evolutionary process.

He said there were export opportunities for the Hastings and Welsh operations.

Progressive Meats is a contract packing-house. It does not purchase stock - it processes meat for a service fee.

Cig Calon Cymru buys stock and has a shop where it sells cooked meat.

"There is certainly the opportunity for further processing of New Zealand product in the plant and there are further opportunities for the Welsh product to be exported out of Wales too."

Jeanette Maxwell, Federated Farmers Meat & Fibre chairwoman, said it made sense for companies such as Progressive to export intellectual property and industry skill.

"If we take a leaf from the automotive industry, Toyota now makes most of its vehicles outside Japan.

"The challenge is in having capital markets which can help us seize these opportunities.

"We also need to be mindful there is still a lot of life left in our 'old' markets."

She said the Welsh purchase was not dissimilar to how Fonterra works globally, or how Brazilian meat processors have become strong through global logistics and supply chain management.

"As New Zealand is a leading global exporter of red meat, we start to match that by becoming a leading global processor and marketer as well.

"It is positive because it maximises opportunities, maximises markets and above all, maximises returns."

Mr Hickson said a common heritage and language helped with the main challenge - learning how business was conducted in "that part of the world".

"Learning is always good."