17 Nov 2022

Alliance Group posts record $117m profit

1:22 pm on 17 November 2022
Alliance Group meatworks in Southland.

Alliance Group chair Murray Taggart says "all the stars have finally lined up" to deliver the meat co-operative a record profit. Photo: RNZ / Nathan McKinnon

The meat co-operative Alliance Group has made a record profit of $117 million for the year ending 30 September 2022 - off a turnover of $2. 2 billion.

The result is a 186 percent increase on the previous year.

Alliance Group chair Murray Taggart said the record performance was a result of a combination of things, including recent strong international meat prices, investment in stream-lining operations and the co-operative putting emphasis on high-value aspects of the market.

"For a couple of years we thought we were going to see the fruits of that but every time we got our hands close to it, it seemed to get snatched away and then this year all the stars have finally lined up," he said.

He said the result was not something Alliance would have predicted at the start of the year.

"But by being agile across markets and optimising where we place products we've ended up in a pretty good space."

The co-operative will make an $11.3m profit distribution to its farmer shareholders, as well as a $10m bonus share issue of one share per qualifying stock unit.

Taggart said given the strong result shareholders could have received a short term "sugar hit", but due to the economic uncertainty it was holding money in reserve, as well as investing in significant projects that would benefit shareholders in the future.

"The world's a very volatile place at the moment ... so we're trying to be pretty prudent," he said.

"We trying to get more robotics in to automate more, but we're also pretty focused on some of our co-product lines where we believe there's a lot more value that can be captured by a little bit of investment."

He cited opportunities around extracting more products from the rendering stream and from pelts, which currently were returning very low value.

"We are looking at opportunities in a very different space for them."

Taggart said Alliance Group was on track to get rid of coal fired boilers from its meat processing plants by 2030 "provided a few things fall into line".

"With current projects we will have an 88 percent reduction in carbon emissions."

Heat pumps and bio-gas solutions would replace the coal boilers.