Abattoir trouble poses growing bad debt threat
SCATS extends trade area with BDR purchase
FARMER owned trading group, SCATS, has bought the assets and business of Lincs-based merchant, BDR, for a seven figure cash sum, doubling its grain throughput and extending its trading area way beyond its traditional southern roots.
The acquisition takes its grain activity to 1.5m tonnes a year, giving SCATS a ready-made share of the all-important eastern counties market.
Grain trading director, Stephen Maxwell, describes the BDR purchase as "an extremely good fit", as the sector concentrates into fewer, larger hands.
Both companies have similar turnover – £94m a year for SCATS and £77m for BDR – and turned in profits of £303,000 and £535,000 respectively in their last published accounts.
Trade reaction has been one of surprise, with few realising SCATS had such expansive objectives. With the company recently taking over the 400,000t-a-year export terminal at Southampton from Continental, most thought its attention would be focused on increasing market share in the south.
But SCATS already has established links with BDRs former parent Conagra. Earlier this year it sold its loss-making agro-chemical business to another Conagra subsidiary, UAP. And in March the two companies formed a joint seeds venture, trading as SCATS AgriSeeds.
This weeks deal includes all 65 BDR staff, the head office at Bourne, plus 55,000t of owned storage and 15 lorries.
The 10,000t BDR seed plant at Bressingham, Norfolk, will be integrated with the SCATS AgriSeeds operation, as will BDRs 50,000t fertiliser business. "We will be offering farmers a wider range of seed and fertiliser products and will have full coverage of all grain markets, both domestic and export," said Mr Maxwell.
BDR will continue to operate as a stand-alone business and there are no plans to change the trading name of either company. *
Bean breeder sold
PBICs winter bean business has been bought by pulse specialists Wherry and Sons of Bourne, Lincs. Chairman James Wherry says current varieties such as Punch, Striker and Clipper will continue to be sold and the breeding programme will be maintained. *
Abattoir trouble poses growing bad debt threat
By Robert Harris
LIVESTOCK farmers face an increasing bad debt risk as abattoirs battle to cope with higher processing costs and lower throughput.
Many in the trade fear that most small abattoirs could disappear within a year. The warning comes a few days after abattoir owners and butchers lobbied MPs at Westminster to highlight the crisis in the sector.
"The strain that slaughterers are coming under is huge, and the massive rise in inspection fees is an increasingly critical factor," says the National Beef Associations chairman, Robert Robinson.
Accounts of a recently collapsed business show that inspection and levy charges equalled 70% of the £8300 a week wages bill. The abattoir paid out £3800 in Meat and Livestock Commission inspection and levy charges and a further £1975 to the Meat Hygiene Service.
"The accounts also reveal that the abattoir, which killed about 250 cattle a week, faced SRM disposal costs of £2875. It had been able to claim about £1000 a week from the renderer before anti-BSE controls were adopted," says Mr Robinson.
"The message this contains for the beef industry is dire. Farmers rely on a wide range of abattoirs with an even geographical spread to process their cattle, but this unforeseen rise in costs is turning the entire slaughter sector into a pressure cooker."
More than 30 small abattoirs have disappeared in the past 12 months, says Richard Stevenson of the National Federation of Meat and Food Traders.
The remaining 150 outfits processing less than 20 livestock units a week could go within three to six months, he adds. That would leave small, specialist producers, typically organic farmers or those supplying niche markets, facing higher haulage costs and welfare problems which could affect meat quality.
"The problems are probably greater among the small/medium abattoirs," says Peter Scott of the British Meat Federation. "They tend to have a longer supply chain and have to compete with the larger plants without benefiting from the same economies of scale."
Mr Stevenson hopes MAFFs "long overdue" announcement on Meat Hygiene Service charges for 1999/2000 will be made soon. "There is no doubt that the UK industry is at a severe competitive disadvantage compared with the rest of the EU. It is very clear that other member states interpret EU directives less rigidly."
But although Mr Scott believes the ministry is looking to reduce the cost burden, scope to do that is limited by EU rules. "There is a certain amount of national legislation that could be changed. But I wouldnt want to raise hopes that big cuts are on the way." *
Going west – R M Addy & Sons, of Deeping St James, Lincs, this week hauled over 40t of barley straw from their own and nearby farms for Staffs dairy farmer Fred Brunts 150-cow herd at Moddershall, near Stone. Straw cost up to £50/t delivered, an unwelcome increase on last years prices when milk prices are under further pressure, says Mrs Brunt. Big bales will also be bought in at £38/t.