Scotland’s largest farmer-owned business, ANM Group, is embarking on a major rationalisation of its meat division which racked up losses of £1.342m last year.
The combined losses of four meat companies plunged the group into the red with a pre-tax loss of £696,000, representing a £1.6m turnaround on 2008’s profit of £863,000.
The increased profit of the core business, Aberdeen and Northern Marts, from £810,000 to £888,000, was not enough to improve the overall losses which are being attributed to higher livestock values that could not be recouped from customers.
“To say 2009 was an incredibly tough year would be an understatement,” chairman John McIntosh told this week’s AGM. “The meat division companies have faced the most challenging circumstances as consumer trends changed significantly towards perceived lower cost products.”
Inverurie slaughterer Scotch Premier Meat lost £882,000; Sheffield processor Yorkshire Premier Meat, £200,000; Moray’s Highland Country Foods, £27,000; and Charcuterie Continental, £233,000.
But new chief executive Alan Craig is confident the meat division will return to profitability this year as a result of action already taken to reduce costs and increase throughput and margins.
A specialist lamb abattoir at Dornoch, Sutherland, closed this week and the business transferred to Inverurie, which will reduce average lamb slaughter costs from £9-11 per lamb to £2.50.
Mr Craig also wants to see throughput of cattle at Inverurie increase by 300 to 1000 a week, reducing fixed costs by £20 a head. The Forres further processing plant has also been closed and that business transferred to Charcuterie Continental.