Ridley has added a feedmill in Carrick, Tasmania to its portfolio. Photo: Ridley
THE RIDLEY Corporation has unveiled the acquisition of a feedmill at Carrick in Tasmania, as well as the construction of a new ingredient-recovery facility and more than $10 million in plant upgrades in releasing its financial results for the year to June 30.
This announcement marks Ridley’s return to Tasmania after selling its Westbury pellet factory to Skretting Australia for $54.85 million in June 2021.
The mill, located 17km west of Launceston, will be purchased from Tasmania’s largest egg producer, Pure Foods Eggs, for $6.5M.
Ridley managing director and chief executive officer Quinton Hildebrand told shareholders the company aims to increase production at the site from a single shift to a three-shift operation.
Mr Hildebrand said Ridley currently supplies 20,000 tonnes of dairy feed to Tasmania via its Pakenham plant in eastern Victoria, and this will now be supplied from the Carrick mill.
“Then as we will have local-supplier status, we think that will support us gaining further market share of the dairy sector within Tasmania,” Mr Hildebrand said.
“The combination of growing our volumes in the Tasmanian market and having capacity to continue increasing our market share out of the Pakenham feedmill into the Gippsland market gives us a good return on this investment.”
Mr Hildebrand also announced the construction of a new leasehold facility to replace an existing ingredient-recovery plant at Timaru, on New Zealand’s South Island.
The plant came as part of the acquisition of petfood input producer Oceania Meat Processors, finalised in March.
He said the facility will be equipped with $9M worth of plate-freezing equipment which will result in the plant processing product in block form rather than in tubs.
Mr Hildebrand said this method was preferred by customers, would be more energy efficient, and would create capacity to grow output.
Commissioning is underway to upgrades at the Clifton feed mill. Photo: Ridley
“We’re very excited by the opportunity that this presents when it comes online before October 2025.”
In the bulk stockfeeds business, a $7.9M project to upgrade the Clifton site, south of Toowoomba, is currently in the commissioning stage.
The project will increase capacity at the site by 25 percent, and accommodate increased demand following the expansion of an existing poultry customer.
An increase in demand after the closure of the AJ Bush rendering business in Sydney has spurred investment in Ridley’s ingredient-recovery segment.
Mr Hildebrand said currently, extra material was being processed by the Maroota plant in north-west Sydney, with the company “now considering what investment opportunities there are to make better use out of those raw materials”.
“We’ve also had raw material growth into our Laverton ingredient-recovery facility and we’ve committed there to a $1.9M debottlenecking project just to give us some runway for that expansion.”
Mr Hildebrand also foreshadowed “a number of other initiatives and growth plans that we’re working on and that we will progress in [FY25], but at this point there isn’t sufficient certainty to elaborate on those.”
Minor earnings growth
Ridley reported a modest increase of 1.7pc to the FY24 earnings before interest, taxes, depreciation and amortisation of $90M.
Net profit after tax for the period fell 4.7pc to $39.9M.
The bulk stockfeeds business led the results, returning an EBITDA of $44.4M, an increase of 23pc on FY23.
“This was a pleasing performance, driven by a 12.7pc increase in ruminant volumes as we gain market share in the dairy sector, enabled by the capacity from our debottlenecking projects.
“We also enjoyed a few months of supplementary feeding during the dry conditions back in quarter one.
“The benefit from the high ruminant volumes was partially offset by the 1.2pc decline in monogastric volumes, which was mostly the result of the…broiler industry breeder limitations.
“However, we did gain through some customer acquisition in the layer sector.”
The packaged feeds and ingredients business reported a decrease in EBITDA of 9pc at $59.7M, attributed to reduced sales prices for tallow and meal, and lower domestic aqua nutrition sales.
The company also incurred costs in the second half from the restructuring of the “underperforming aquafeed business” and pivot to increase capacity in the packaged petfood segment.
In FY25, Mr Hildebrand said he was confident the bulk stockfeeds business would continue to record strong financial results from increased capacity at Clifton and Pakenham, growth in the Tasmanian market and increased broiler feed volumes following the recovery from industry breeder limitations.
The packaged and ingredients segment was also expected to rebound due to the full-year earnings contribution of OMP and increased volumes following the closure of AJ Bush.
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