Processing partnerships, greenfields or other opportunities for expansion will be under consideration by WAMMCO as the cooperative moves to meet the future demands of its producer members and the increasing appetite for prime WA lamb of its overseas customers.
WAMMCO Chairman Dawson Bradford and Chief Executive Des Griffiths told The West Australian in a recent business interview that the cooperative was looking to accommodate a 50 percent lift in prime lamb production in WA over the next five years.
Des indicated that whereas Katanning would remain the focus of its export lamb processing enterprise, WAMMCO would be exploring other potential for expansion, because of limiting labour and infrastructures.
Management graduate with WAMMCO in Katanning, Jonathon Potter had recently been assigned to research the best options for the cooperative to accommodate a significant lift in processing capacity.
“Any expansion is more likely to be north of Perth and could involve an acquisition or a partnership,” Des said. “We would prefer to explore partnership opportunities with an existing operator to avoid the cost and approval delays of a greenfields site.”
He estimated the cost of the expansion at between $10 and $20 million.
Labour shortages at Katanning were already limiting the amount of value adding required to increase WAMMCO’s exports to the lucrative US market. This market was already taking about 40 percent of WAMMCO’s total lamb kill and was expected to underwrite the further expansion of processing capacity.
“We are still operating short of about 50 people on any one day at Katanning, and really we need access – preferably on a permanent basis - to workers from overseas.”
Des told reporter Cathy Bolt that the average size of lambs purchased by WAMMCO had jumped over the past four years from 18kg to 22 kg, as producers changed their breeding, feeding and marketing programs to capture the higher prices on offer.
He expected this year’s turnover to reach $90 million, topping last year’s first significant profit result of $1.77 million on revenue of $82.4 million.
Dawson confirmed that his fellow directors were firmly committed to retaining WAMMCO as a producer cooperative.
“The benefits to our producer shareholder members are now becoming apparent, and these will expand as we continue to grow to meet new market opportunities,” he said.
“Containing costs also remains one of our key focuses because efficiency is fundamental to our ability to maximise producer benefits.”
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