The performance of Alliance Group's Southland plants has been praised by the company's chief executive Murray Taggart in last week's announcement of the company's operating result of $8million for the year ending 30 September 2018.

The result came on the back of a substantial lift in payments to farmer shareholders.

Mr Taggart said last year was a challenging season, with real pressure spots in terms of having enough capacity, alongside big lulls in-between, making for interesting management.

Murray Taggart
Murray Taggart

''The plants performed very well under pressure when farms really needed them to,'' he said.

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As an example, he said the team at Mataura killed on Sundays to try to accommodate the Mycoplasma bovis kill on top of the normal kill.

''Full marks to those guys recognising that there were farmers in very difficult spots. The team bent over backwards to help them out.''
Last season also saw significant investment in the South.

''We now have the venison plant up and running and it's hitting tally, which is good,'' Mr Taggart said. ''There is still some fine-tuning to be done at the new facility.''

Mr Taggart said the company was also investing in upgrading the chiller management systems and the engine room at Lorneville with a view to developing more energy efficiency and improving yields by managing the chilling better.

He said Alliance would continue to look at further investment opportunities in the added-value space.

In announcing its result, the 100% farmer-owned co-operative said it had increased turnover to $1.8billion (turnover was $1.5billion in 2017) and paid out more than $1.2billion to farmer shareholders for livestock. Shareholders will also receive a bonus share issue based on livestock supply during the 2017/18 financial year.

Mr Taggart said the lower result ($20.2million in 2017) was partly due to a greater share of revenue being paid to farmers.

Alliance also increased ovine processing capacity and added overtime to assist farmers during the summer dry spell, which meant costs were higher than anticipated.

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Market prices for lamb eased late in the season and procurement pricing was slow to align, impacting late season profitability, Mr Taggart said.

He said the co-operative had made good progress improving the operational performance and lifting capability within the business.

David Surveyor, chief executive of Alliance Group, said that as part of the transition to a food and solutions co-operative, Alliance has been building capability and strengthening sales and marketing activity.

''Alliance is a more competitive co-operative as a result of our progress on lifting efficiency, improving our operational performance and identifying opportunities,'' he said. ''There is still a lot of effort necessary to lift the profitability of the co-operative to [the] more sustainable levels that we and our farmer shareholders expect.''

Southern Rural Life