After the recent opening its state-of-the-art feed mill in Victoria, Australia-based feed company Ridley is to close 2 of its smaller plants in the state.
From its headquarters in Melbourne, Ridley Corporation Ltd. (Ridley) has announced the imminent closure of its feed mill in Mooroopna, and an older facility at Bendigo — both in Victoria.
Part of the reorganization and restructuring of the company that started last year, the closures come after the firm’s commissioning of a new facility at Wellsford near Bendigo. Among the consequences is the transfer of production from the two older plants to the new feed mill.
With an annual capacity of 350,000 metric tons (mt) of poultry and pig feed, the Wellsford mill has been constructed and commissioned on schedule in recent months. Cost of the new facility was AUD47 million (US$33 million).
Even after the closures and transfer of their production to the new facility, there will still be an additional 70,000 mt of feed production capacity at the new feed mill, according to Ridley.
Explaining the changes, CEO and managing director, Quinton Hildebrand, said the firm needed to take full commercial advantage of the superior efficiency and product quality at the new plant.
To cover the closure, site security, and remediation of the two former facilities, Ridley is forecasting costs of AUD6 million. This will be achieved as asset impairments and write-downs, rather than cash costs.
The firm’s former Bendigo site is set to be demolished and redeveloped.
Located in an old flour mill, closure of the Mooroopna plant over the coming months will result in the loss of 17 jobs, reports Riverine Herald.
Hildebrand said that commissioning of the Wellsford plant and rationalization of operations in the region represent the conclusion of Ridley’s portfolio modernization program.
“Our focus for the year ahead will be to improve utilization across our asset portfolio, and to generate the increased earnings and cash flow from the investments at the four plants at Pakenham, Lara, Westbury and Wellsford that we constructed in the last eight years,” he said.
More on Ridley Corp.
In 2018, Ridley produced 2.05 million metric tons of feed from its 22 mills, according to the Feed Strategy World’s Leading Feed Producers database.
As well as for poultry and pig feeds, the firm produces feed for dairy and beef cattle, sheep, horses, lab animals and dogs. In 2016, Ridley acquired a minority share of a joint venture interest in Pen Ngern Feedmill Co. (PNFM). Domiciled in Thailand, PNFM owns and operates a dedicated aquafeed manufacturing facility.
Last year, the company announced its internal restructuring plan. Involving a significant reduction in staffing levels throughout the organization, the plan was to be implemented in November 2019.
One month previously, Ridley closed its feed mill at Murray Bridge in South Victoria. The move came after a loss of business after poultry integrator Ingham’s built its own feed mill in the area.
In its latest company report — for the half-year to December 31, 2019 — Ridley’s revenue from its ordinary business was down almost 7% year-over-year to AUD487.3 million.
Reported profit (EBITDA) from ongoing operations was marginally higher at AUD30.7 million. The firm’s performance was described as “pleasing,” taking into account the drought conditions in the states of Queensland and New South Wales.
In February, the company reached a commercial agreement with poultry company Baiada. This involved amendment of their supply agreement. While Baiada terminated legal proceedings, Ridley agreed to pay Baiada a total of AUD1.395 million.