West­pork buys farms, says de­mand strong

Countryman - - NEWS - Zach Relph

West­pork boss Neil Fer­gu­son is bullish the Aus­tralian pork sec­tor will re­bound from a topsy-turvy year, flag­ging the up­beat view as cat­a­lyst in ac­quir­ing two for­mer GD Pork op­er­a­tions.

Mr Fer­gu­son re­vealed last Wed­nes­day the com­pany had agreed to pur­chase GD Pork’s Ko­jonup and West Pin­jarra farms, af­ter the failed pig­gery went into ad­min­is­tra­tion in No­vem­ber ow­ing cred­i­tors $40 mil­lion.

The move in­creases West­pork’s stake in WA’s pig­gery trade from 35 per cent of the State’s to­tal pro­duc­tion to about 45 per cent, with the pro­ducer al­ready boast­ing six pig­geries and four con­tract farm­ers.

Mr Fer­gu­son told Coun­try­man the move was un­der­pinned by a strong faith the na­tion’s pork prices would re­gain strength in the wake of global over­sup­ply caus­ing last year’s low pork prices which knocked the in­dus­try.

“We be­lieve in the de­mand for pigs and the fu­ture of growth in the pig in­dus­try,” he said.

“De­mand for pork has been strong. The in­dus­try did have a down­turn, but it is be­cause sup­ply out­grew that de­mand and de­mand through­out the pe­riod did re­main strong.

“We thought GD Pork was a longterm in­dus­try player and re­gret­tably they went into ad­min­is­tra­tion so we took the op­por­tu­nity.”

The pur­chase price of the two farms re­mains undis­closed, with the sale com­ple­tion ear­marked for later this month.

Mr Fer­gu­son said West­pork would work with the De­part­ment of Water and En­vi­ron­men­tal Reg­u­la­tion to up­grade the waste treat­ment sys­tems at Ko­jonup and West Pin­jarra as­sets.

He ruled out plac­ing a dol­larfig­ure on the re­spec­tive up­grades.

“Some of the up­grades will com­mence straight away af­ter set­tle­ment,” Mr Fer­gu­son said.

“Other up­grades will be sub­ject to ap­proval, so we will need to go through the ap­proval process DWER has in place.”

Last year’s record-high grain prices and bur­geon­ing com­pe­ti­tion from in­ter­na­tional com­peti­tors, along­side the over-sup­ply caused by in­creased pro­duc­tiv­ity, cost WA pig farm­ers about $60 per pig pro­duced. For­mer Pork CRC chief ex­ec­u­tive Roger Camp­bell also cham­pi­oned the in­dus­try’s resur­gence last month, tip­ping it to emerge from the down­turn “stronger and more re­silient”.

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