THE AUSTRALIAN Lamb Company plans to increase its mutton and lamb kill at Colac’s CRF plant, as Coles winds down its lamb processing commitment at the small stock abattoir.
CRF has been courting new business after it lost a Coles lamb processing contract and the supermarket started a phased transfer of its lamb kill to JBS Australia’s Brooklyn plant.
ALC livestock manager Ben Verrall said yesterday the Melbourne-based company had been working with CRF for the last 10 years, and was looking to grow and strengthen that relationship.
“It gives us the ability to buy sheep locally and support the area with purchases of livestock.”
Mr Verrall said ALC killed 3000 sheep at the CRF plant last week, would process 3000 sheep in Colac this week and planned to increase this, eventually offering forward prices for mutton, similar to the grid it offered to producers for lamb.
“We will be offering spot prices on mutton and lamb going forward - we will have grids.”
“I’ve got lamb prices out to November, so once we find our feet and get going on our mutton then we will be able to do the same,” he said.
“We will be trying to open new markets for mutton and lamb, and selling mutton to our existing lamb customers.
“We are putting our lamb principles to mutton; so eating and packing quality to make the product look good and present well on a plate.”
Mr Verrall said ALC had been processing about 50,000 mutton sheep a year, but with some changes this could triple. The increased available processing capacity at CRF had already enabled ALC to open new markets for lamb in China and Malaysia, he said.
Garry Edwards, principal of EC Agribusiness, the part-owner of the CRF Colac plant with chief executive Jack Barclay, said Coles would transfer its lamb processing to JBS over the next 3-4 months.
Coles was processing about 10,000 lambs a week at the CRF plant before it awarded its lamb tender to JBS Australia’s Brooklyn plant. The CRF plant is currently processing about 20,000 lambs a week, with half of these for Coles, which is also killing 5000 lambs a week at JBS’ Brooklyn plant.
Mr Edwards said the phased pull-out by Coles would allow CRF to offer its processing capacity to other companies, including the Australian Lamb Company.
“What will happen is that as the Coles numbers ramp down we will make that capacity available to other people who are killing there at the moment.”
Mr Edwards said ALC would be given first right to increase their processing capacity at Colac.
“There are two others that we are talking to, but I obviously can’t name them at this point in time.”
But Mr Edwards said the other two contenders were dealing in a mixture of lamb and mutton.
The Coles pull-out would not put the business at risk, he said.
“Frankly they have been pretty co-operative in how they have gone about this because by doing it as a phased approach they get to transition it to JBS and we get to transition the production to other customers.”
Mr Edwards was confident the current workforce of about 300 at the Colac plant would stay employed under the business’s “Plan B” to attract new business should the Coles tender be lost.
“Based on being able to transition it this way I am not expecting any job losses, but it will mean a significant change in operations.”
The CRF business will have more autonomy in the future, with more flexibility to take on new business, he said.
