WAMMCO delivers mixed financial fortunes
In the face of low global lamb numbers, WA Meat Marketing Co-Operative reported a pre-tax net profit of $4 million, before its $2.75 million pool distributions, at its annual general meeting in Katanning.
This year’s event attracted one of the biggest turnouts ever — more than 50 people — with a number of topics of interest, particularly as sheep values remain at historical highs and WAMMCO members were averaging a return of $6.97/kg.
WAMMCO chairman Craig Heggaton said the 2018-19 trading year was one of contrasts and challenges.
“While producers continued to have record price returns for their livestock, processors were struggling to return viable margins,” he said.
“There was limited supply of livestock, continued drought conditions in Eastern States and the low Australian dollar to contend with, plus the knock-on effect of African swine fever in China.”
WAMMCO’s reported turnover in 2018-19 fell to $329 million, from $380 million a year earlier.
The company processed just under two million stock units in 2018/19, split between its two plants at at Katanning and Goulburn.
Katanning throughputs remained strong while Goulburn operated on restricted numbers from January onwards due to a Chinese license suspension, which was the result of an incorrectly labelled container.
WAMMCO is expected to add another 20 per cent to its annual throughput with its new $3 million boning room, which was finished in September, while Goulburn’s new load-out system, completed in April, will reduce labour costs.
Despite the shortfall from the previous 2017-18 season profit of $20.2 million, WAMMCO chief executive Coll MacRury said North America, the Middle East, South East Asia and China would continue to offer unlimited opportunities for growth.
“We will continue to focus on product quality for our lamb and mutton products,” he said.
“North America remained the number one lamb market by value, and number three by volume.”
Mr MacRury said WAMMCO’s 20 per cent stake in The Lamb Company, which was earmarked to achieve total sales revenue of more than $1 billion per annum in North America by 2022, would continue to return great dividends, against all other options.
“Being part of this financial and branding cooperation with the big three New Zealand processors has certainly enabled WAMMCO to take advantage,” he said.
“North American consumers are flocking to our Opal Valley brand that delivers the highest quality lamb raised without antibiotics or hormones in a free-range environment, which is creating a social media hit.”
Mr MacRury said China had lifted demand for low to mid-range cuts to all-time highs as a result of the African swine fever issues.
“The Chinese market is still volatile,” he said.
“The international marketplace will continue to offer strong opportunities, but we welcome also the announcement of major US retailer Costco to build a new warehouse supermarket in Perth in 2020 in which WAMMCO will supply lamb.”
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