Fletcher considers buying U.E.B. lucerne plants

Press, 26 May 1979, Page 18

Fletcher considers buying U.E.B. lucerne plants

PA Ashburton Fletcher Lucerne, Ltd, is evaluating the prospect of purchasing the U.E.8., Industries, Ltd, export lucerne processing plants in Marlborough, and Hawke’s Bay. After failing to sell its lucerne dehydration plants in both areas, U.E.B. plans to close them on June 8. Fletcher Lucerne’s manager (Mr J. J. M. Lubeck) said that his company had received an approach from U.E.8., and would investigate it over the next month. If the U.E.B. plants do close down, Fletcher Lucerne will be the only exportlucerne processing company left in the country. “As far as we are concerned, there are no problems on the horizon which suggest we are going to run into the difficulties that U.E.B. has apparently faced,” Mr Lubeck said. A key factor to the Fletcher company remaining viable was the development of sun-cured lucerne processing. This uses 90 per cent less fuel oil than the traditional greenchop dehydration process, which Fletchers also still undertake, and which I was the main method of i lucerne processing used by I U.E.B.

i “Our situation is that 35 i per cent of our processing is I dehydration, and sun-cured ; lucerne, plus other less intensive products make up the rest. “Our efforts to broaden the base of our business, by introducing other products such as the crop residue based sheep nut, which we have already been successfully selling, and a further nut we are looking at based on sprouted barley, wheat and low-grade peas, has been paying off," said Mr Lubeck. Because negotiations for the sale of its lucerne dehydration plants at Blenheim and Ongaonga, and central Hawke’s Bay were not succedssful, U.E.B. Marlborough Protein, Ltd, will cease production at both locations on June 8, the company’s chairman (Mr A. P. Saker) said at a meeting of Marlborough lucerne growers in Belnheim on Thursday. Mr Saker said that the company had made a very significant investment in the lucerne dehydration industry, j because it believed that j lucerne had a long-term ! future. Its aim had been to ! develop a product suitable

as a protein-supplement for;, humans. ; 1 A number of factors had , resulted in the scheme no longer being viable, in its , present form, he said. The in- < crease in the cost of fuel oil, < and further increases ex- i pected before the start of the i next season, would mean that • the energy costs of < dehydration would rise more than 450 per cent since 1973. i The company had investi- : gated the possibilty of i changing to wood-waste, or < coal at Blenheim, but on j present costs, the use of < wood-waste offered no bene- 1 fits, and although coal would j reduce the costs of dehy- 1 dration, it would require ex- ( penditure of up to SIM for i plant-conversion. The company decided ’ against such expenditure, in 1 view of the Government’s i announced intention to inter- f relate the costs of all main i forms, of energy. 1 Other factors that the I company had considered were electricity price-rises in 1 the last four years, which had : increased costs $50,000, ( doubts expressed about the future of Picton as an over- ' seas port, and the fact that; ■ the price paid by theT

Japanese for dehydrated lucerne pellets was unlikely to increase substantially. “The majority of our production is exported. “However. in selling on an overseas market, one cannot anticipate that prices will rise sufficiently to cover substantial increased internal costs,” said Mr Saker. He said that it was clear that dehydrated lucerne was a good quality protein, but it was not essential to a quality feed formula. Other proteins, which did not require a large energy input for dehydration, could perform the same nutritional function as lucerne if price comparisons dictated their use. “When the cost of energy was a lot lower, in the 1950’s and 60’s lucerne was able to compete more than favourably with other middle proteins, but this is no longer the case,” Mr Saker said. Discussions were being held with the permanent staff — 15 in Blenheim, and 6 in Ongaonga — and their union representatives so that I redundancy arrangements 'could be worked out.