Richmond wants higher margins

The meat company boss has told a Federated Farmers conference that despite perceptions of a strong profit for Richmond last year, the company was yet to deliver to his satisfaction in terms of margin.

"This is the critical focus going forward, if we are to meet the expectations of shareholders, farmer suppliers and potential investors."

For the year ended September 2000 Richmond reported a profit of $11.9 million, a much improved result on the previous year's loss of $852,000.

Mr Loughlin says the current positive state of affairs in New Zealand's agribusiness sector had arisen from three sources - the exchange rate, favourable market conditions for most products and the industry's own performance.

"While we cannot control the first, and may be able to influence the second, it is in the area of performance where we have the greatest opportunity to determine our destiny.

"Our challenge is to deliver performance in a classical old industry sense - such as upgrading to value added, attaining more recoveries, reducing processing costs, better capital asset utilisation - but we must also take the next steps in terms of new products."

Mr Loughlin says the meat industry has a number of lessons to learn from other industries, including dairy, and it will require a greater commitment from farmers.

"Currently too great a segment of the livestock supply base is totally commodity oriented. For many it is about trading animals as commodities, without any relationship to consumer focussed marketing of tailored products in a totally reliable supply chain."

Mr Loughlin says the meat industry make the necessary investment in research, innovation and product development to make the long term transition from traditional meat industry to food industry.

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