One of the purchases is a newly established Melbourne-based petfood processing operation. File pic Photo: 123RF
The diversified agri-business group Scales Corporation is investing about $A27 million ($NZ30.9m) to expand its Australian business.
Scales will take a 33 percent interest in a newly established Melbourne-based petfood processing operation, and half of the Australian operations of Fayman International, which includes a 42.5 percent interest in ANZ Exports.
Scales managing director Andy Borland said the processing business, to be known as Meateor Australia, would invest in state-of-the-art equipment to develop a high-quality processing facility.
“It’s not a massive investment for us, but it’s an important one. And we’ll be meeting return on capital employed hurdle of 12.5 percent, quite satisfactorily on this transaction,” Borland said, adding the purchase would be paid for in cash.
“Get’s us boots on the ground with bricks and mortar in Australia … and really just helps us be that important global supplier to the big pet food manufacturing businesses across the globe.”
Meateor was expected to be operational in the first quarter of 2023 and up to full production later the same year.
“Our partners include the Fayman family, who bring extensive supply relationships to the operation,” Borland said, adding that Scales would take an active role alongside the partners in the processing business.
“Australia’s product mix, growth, and proximity to Asia make it a strategically important supply base for both our petfood customers and edible byproducts markets,” he said.
“The investment also unlocks potential synergies in our sea-freight logistics activities.”
The company said investments were unlikely to have a material effect on earnings in the financial year ended in December, but it was possible there would be some disruption to earnings ahead of Meateor scaling up to full production.
Copyright © 2022, Radio New Zealand
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