Waitaki ‘could leave industry’

Press, 26 September 1989, Page 3

Waitaki ‘could leave industry’

By

PATTRICK SMELLIE

in Wellington

Meat industry restructuring could eventually see the giant player, Waitaki International, Ltd, leaving the industry altogether, a senior Waitaki executive indicated yesterday.

Asked whether present restructuring negotiations could eventually see Waitaki’s demise, the company’s managing director, Mr Barney Sundstrum, said, “That’s a possibility.” . A conditional deal for the sale of all of Waitaki s North Island works was announced late yesterday afternoon.

It will see the Auckland farmers’ co-operative meat company, AFFCO, add Waitaki’s five meat works to AFFCO’s six, for an undisclosed sum. Waitaki will retain a 25 per cent shareholding in the enlarged company, which will be renamed AFFCO New Zealand, Ltd. The managing director of AFFCO, Mr Max Toy, said Waitaki would retain that holding for “at least five years.” After that, it would gradually be sold to AFFCO, under terms which were mutually agreed.

The deal is still subject to. shareholder and Commerce Commission approval, as well as resolution on issues such as financing and redundancies. The chairman of AFFCO, Mr Bryan Wills, said a capitalisation programme would be required of farmers, with details to be announced soon. Industry sources yesterday speculated that a similar deal could be in the offing for Waitaki’s South island works, with the company confirming last Friday that it was having discussions with the Southland-based Alliance Freezing Company, Ltd. This would see the largest player in the New Zealand meat industry transformed into a cashed-up shell company, with no meat-processing assets. If so, it would give the company’s two biggest shareholders — Fletcher Challenge, Ltd, and Goodman Fielder Wattie, Ltd, both with 29 per cent — a chance to exit the industry in the orderly way they have sought for more than a year. It is less clear how a 14 per cent shareholder, Freesia Meats, Ltd — a Meat Board subsidiary — would regard the deal. The chairman of both Waitaki and GFW, Mr Pdt Goodman, said rationalising ownership was the first step to overcoming the meat industry’s problems.