PPCS bids anew for CFM

Press, 6 May 1981, Page 30

PPCS bids anew for CFM

The Primary Producers’ Co-operative Society. Ltd, intends to increase its shareholding in Canterbury Frozen Meat Company. Ltd, from 24.6 per cent to 35 per cent. Yesterday R. a. Jarden and Company, the Wellington sharebroker, announced that it was standing in the market for 900,000 CFM shares. The price offered is 360 c an ordinary share and 300 c for each specified preference Permission for PPCS to increase its shareholding in CFM has been received from the Examiner of Commercial Practices. The chairman of PPCS (Mr R. A. Burnside) said that the increased shareholding was being sought to protect access to killing facilities for South Island farmers. “For some time now farmers have been concerned that the meat processing industry has not properly understood the best interests and needs of the farming community,” said Mr Burnside. “In our view the processing sector of the meat industry has become more and more vulnerable to changes in attitudes of the investing public. “By responding more to farmer requirements the investment yield to all shareholders will also be maximised. “Because we represent more than 10,000 farmer shareholders in the South Island we believe we have to help maintain the meat freezing industry, to provide more influence and to help

maintain the open door policy for producers,” Mr Burnside said. Meanwhile. CFM confirmed in a detailed halfyearly report that it is doing well. The chairman (Mr I. E. 0. McKellar) said that export ■meat trading would make a worthwhile contribution to profits, and that the company might achieve a record kill. By marketing a proportion of its own product, the company has greater flebibility in the use of its processing facilities, enabling maximum use to be made of its cutting rooms, he says. Mr McKellar says that there have been strong inquiries for lambs from the Mediterranean, Middle East, and North American markets. With contracts to Iran. Iraq and Devco (North America) it is unlikely that the voluntary restraints agreement with the E.E.C. will need to be actioned. Mutton sales are at good levels with Russia and Japan, and prices are expected to remain firm. Prices for beef and fancy meats remain low, with little prospect of any improvement in the near future. Pelt values increased in April, but these have now returned to their former low level. Wool and tallow prices have firmed, but there is no improvement in the returns on feeding meals. Killings for sheep and lambs to April 24 totalled 3,642,300 compared with 3,328,500 for the same period last year, Mr McKellar says. Pressure on killing space at

all CFM's sheep and lamb works is not expected to ease until well into the month. Forecasts for the remainder of the season indicate that the company may even exceed its 1975-76 record tally of 4,331,900. Drought conditions throughout most of the company’s drafting have resulted in a decrease in the average weight of lambs. At this stage, the cattle kill is higher than last season, 58,130, compared with 47,970. "Unfortunately, much good breeding stock is still being put up for slaughter, a fact which seems to indicate a general lack of confidence in the future of New Zealand beef farming,” he says. “The British seamen’s strike caused a major disruption to shipping schedules earlier in the season. Another problem was that large quantities of mutton destined for the Soviet Union have not been shipped and are still held in storage. Storage space is in short supply and is unlikely to ease before the | end of the killing season. Referring to capital expenditure, Mr McKellar says that a scheme to upgrade pig killing facilities at the Belfast works has been approved. The first stage of a major programme to upgrade the stockyards at the Canterbury works, necessary to comply with E.E.C. hygiene regulations, has been completed. There will be a major extension to the lamb cutting facilities at the Canterbury works. A new effluent treat-

ment system at the Belfast! works is nearing completion -f An agreement for the ac' quisition of B. R. Shackel Ltd. was finalised on March 27. This will effectively I double the size of involvement in local meat trading. Mr Brian Shackel 1 the previous owner, will be responsible for the whole of the group's local trade I activities. J e P°A ted - operating f profit for the year ending August 31 should exceed last W year's figure, although the company is unlikely to match last year's profit after $ extraordinary items of 56.2 M including ?1.5M from the sale of shares in the NCF Kaia- «• poi. Ltd. The increased interim divj. dend of 8c a share should not be construed as an indication of a higher total dividend I Last year the interim divi- 1 dend was 6.5 c and the total $ for the year 18c. This year's interim dend will again be paid from released capital profits and ’ is therefore tax-free.