Denials Hollow: Chinese Buyer Will Close Meat Plants
Silver Fern Farms’ denial that both its Gore and Ashburton meat plants will close under Chinese ownership is as deceptive as their presentation to the New Zealand shareholders, who were denied critical information given to the Chinese buyers, says New Zealand First.
“What the Chinese buyers were told came directly from Silver Fern Farms whose management is now caught by its own words. And those words are more than enough to have those responsible for them dismissed,” says New Zealand First Leader and Northland MP Rt Hon Winston Peters.
“The plans to close the plants are clearly spelled out in the buyer’s business analysis.
“There’s no denying these statements from buyer Shanghai Maling: ‘The optimisation plan for South Island plant is to close the mutton plant in Fairton and Waitane’.
“Silver Fern Farms is playing with words in their denial.
“Chief executive Dean Hamilton says ‘there has been no decision ….to do anything differently next year at any plant’.
“He says ‘next year’, but what about 2018?
“In the 570-plus page business document on the purchase, Shanghai Maling states that both plants will close to increase in earnings before interest, taxes, depreciation and amortisation (EBITDA) for the 2018 financial year.
“Dean Hamilton went on to say: ‘… we will continue to periodically review the effectiveness of all our plant network’.
“The interpretation is that ‘periodically’ means when the chief executive from Shanghai Maling takes over. That person will put the decision that has already been made into action.
“The closing of the Gore and Ashburton plants will be tough on the local workers and communities, and will harm those regional economies.
“That will be the price of a foreign takeover of our biggest meat exporter,” says Mr Peters.
Translated from the Shanghai Maling report:
Capital Expenditure and Depreciation
The optimisation plan for South Island plant is to close the mutton plant in Fairton and Waitane. The asset sales from the two plants and saving in relevant costs will bring about a cash flow of 23 million and 12.4 million NZD increase in EBITDA for the 2018 financial year.