Meat processing rivals unite to tackle coronavirus turmoil

Greenlea managing director Tony Egan. Photo / Supplied

New Zealand's fiercely competitive meat processing companies are getting their heads together to work through the coronavirus turmoil, says leading industry player Tony Egan, of Greenlea.

While emergency services, not meat processors, spring to mind when talking "essential services", companies which process livestock for food - and relieve farming stress during drought - consider themselves essential providers and have banded together to help each other during the pandemic, he said.

The Greenlea managing director said companies in the $9 billion industry had come together "as Kiwis" to try to help each other deal with the situation and come up with best practice.

"There's been a really encouraging amount of collaboration and sharing of best practice and helping with each other's problems. We are seeing a spirit in a market sense of better collaboration to achieve better outcomes for New Zealand," said Egan, whose family-owned company employs 460 staff and processes cattle for export and the domestic markets at two big sites in Hamilton and Morrinsville.

"We're also endeavouring to build a protocol with several other meat companies in case something happens to one of us. All while keeping in mind throughout this we're having to stay at full production because farmers are still dealing with some pretty significant situations around drought."

The most concerning issue right now for Greenlea as a busy processing time looms is the potential for schools to close and staff being unable to work fulltime.

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The company has bought multiple laptops so some staff can work from home, but it was challenging trying to figure out how a company which relied heavily on a chain-based or process-based operation could cope, Egan said.

At least 360 of Greenlea's total workforce are involved in meat process work.

Egan said the year had been one challenge after another.

China's release of its pork reserves in January resulted in prices on all protein meat falling by up to 20 per cent, which a lower exchange partly helped offset, then came drought and water shortages, coronavirus and a shortage of containers.

"At times we've sailed close to the wind but I have to say the industry has done a reasonably good job of staying fully productive more or less right through, which is a credit to the logistics and sales skills throughout the industry.

"I think we've done better than some other countries."

China, where coronavirus first broke out, is Greenlea's main export market.

Egan said there had been significant market uncertainty after the extended Chinese New Year commercial shutdown because of the virus, but Greenlea had been fortunate to have very good foundation customers there who were able to keep meat trade going.

"There was some delay in container shipping but it didn't lead to any cancellations.

"We're now approaching a more normal pattern and seeing a gradual return to regular orders being taken. The shipping issues are still there and will be exacerbated by the apple crop leaving New Zealand but we've managed to cope.

"We proved there were a range of other markets we could rely on."

Greenlea exports to 45 markets other than China.

Egan said congestion at China's ports was starting to ease but there were still issues with south-bound shipments, containers and logistics.

"But in terms of fundamental demand for meat both at retail and home delivery level, New Zealand meat is in hot demand [in China] and their protein shortage is still there.

"If you put all those other challenges aside, the outlook for New Zealand meat is still very positive."