THE Administrator’s fire-sale of assets surrounding the Kimberley Meat Co beef processing plant near Broome in Western Australia’s remote northwest marks another sad chapter in the history of Northern Australian meat processing.

Administrators Richard Tucker, Anthony Miskiewicz and David Osborne from KordaMentha on Friday closed expressions of interest in the processing asset, together with parent company Yeeda Pastoral’s two nearby grazing properties and a parcel of residential properties in the area.

Offers were accepted for the whole, or pastoral and processing assets separately.

A source close to the sale process said ‘significant interest’ had been shown from both domestic and offshore inquiry in the processing facility, but he declined to offer a number about how many formal expressions had been received. We asked the same question of KordaMentha, and will publish any response here.

“Firstly, they know there is going to be a sale. There’s one thing that the administrators KordaMentha don’t want to do, and that is run a cattle and/or meat processing business,” the source said.

“Interested parties know there is an absolute obligation to sell. That does not necessarily mean it sells at a bargain basement price, it’s about creating market tension to get a fair price,” he said.

The administrators’ report suggested the companies were $103 million in debt at the time they entered voluntary administration, split roughly equally between secured and unsecured creditors. The largest was the Commonwealth Bank of Australia, owed $43.6 million.

What surprised some onlookers was how quickly the sale process unfolded. KordaMentha was only appointed administrator on 27 February, after Kimberley Meat Co went into voluntary administration. Its parent company Yeeda Pastoral Co and several associated companies followed two days later.

That means the entire process from appointment of administrators to closure of expressions of interest on the plant took just 80 days. A first administrator’s report released back in March suggested the sale process could take up to six months.

Clearly the administrators were keen to wrap up the process quickly, rather than being left with a difficult-to-manage asset, Beef Central was told.

High expectations when built in 2016

The Kimberley Meat Co plant was built under great fanfare in 2016 by Merv Key and his partners including Yeeda founder Jack Burton.

In 2021, KMC’s owners attempted to create a cooperative designed to transfer ownership to local landholders. The WA state government apparently intended funding the local pastoralists into the deal, but allegedly pulled out at the final stage.

Daily production capacity at the plant is around 220 head, with an annual season around 40 weeks, accounting for around 45,000 head a year.

It’s understood the processing plant only operated briefly at a low output level earlier this year, and was closed for lengthy periods over the previous two years due to large numbers of cattle being relocated out of the Kimberley for restocking in other parts of Australia after drought.

It reopened briefly in April 2023, operating as a wholly-owned subsidiary of Yeeda Pastoral Co.

Merv Key sold his 45 percent stake in the plant, together with his share of parent company Yeeda Pastoral Co, to one of his existing partners, ADM Australia, in October last year.

The ADM group’s major shareholder is Hong Kong-based equity fund Asia Debt Management Capital (ADM Capital), which has agricultural investments worldwide, including irrigated tree cropping, stockfeed and commodities trading businesses in Australia. Yeeda and Kimberley Meat Co were ADM’s first investments in the Australian red meat supply chain, Beef Central was told at the time.

The balance of the KMC/Yeeda shareholding (20pc) is owned by another long-term investor, Fitzroy River Ltd, described as a family office based in the US and Argentina which has held a stake in Yeeda for the past ten years. Kimberley Meat Co preferred to keep its heavy foreign capital exposure discrete.

Obligations under the Foreign Investment Review Board Act may explain a late flurry of public advertising around the processing asset this month – as recently as the last seven days prior to closure of expressions of interest.

One of the obvious potential buyer targets for the processing asset, Brazilian-owned meat processor Minerva, which has bought two large sheep processing facilities in WA and another in Victoria in the past couple of years, was contacted about the Kimberley sale, but did not respond to the administrators, Beef Central was told.

Pastoral assets cover 475,000ha

The administrators’ sale process also includes Yeeda Pastoral Co’s s two large nearby pastoral leases, Yeeda and Mt Jowlaenga stations outside Broome, the cattle and a number of residential assets in Derby and Broome.

The Yeeda pastoral aggregation covers 475,000ha of mostly leasehold country, with a current potential carrying capacity of 22,990 standard cattle units. The walk-in, walk-out sale will include around 13,800 head, counted in a partial muster in October last year.

Yeeda was the first station taken up in the Kimberley and is uniquely placed at the mouth of the Fitzroy River and Yeeda Creek, with extensive flood-out country producing high quality grazing suitable for breeding, growing and finishing cattle. There is scope to increase the potential carrying capacity with additional capital works, subject to approval, marketing agents said.

Yeeda and Mt Jowlaenga include several centre pivot sites, extensive seasonal surface water, 26 bores servicing 39 water points plus 13 permanent dams and water holes.

The properties have a conditionally registered 25-year HIR carbon project estimated at 288,000 ACCUs.

Final nail in the coffin for remote northern processing?

The challenging operating conditions for red meat processing in remote regions of northern Australia has again been laid bare by the Kimberley Meat Co saga.

It is somewhat ironic that at precisely the same time as administrators try to sell the carcase of the Kimberley Meat Co plant, the remains of the old Katherine meatworks across the border in the Northern Territory are also being marketed, through a campaign being managed by Elders.

Built in 1963 by a syndicate of owners including Hooker Corp, Australian Agricultural Co, Scottish Australian, John Swire & Sons, Bryce Killen and Richard F (Dick) Condon, the original Northern Meat Exporters Pty Ltd plant operated highly successfully for 30 years, before live export competitive pressure forced the business’s closure. At is peak, the plant killed around 550 a day, producing a single product exported out of the Port of Darwin direct to west coast US ports: frozen lean manufacturing beef. Final owner Teys Brothers killed its last beast in 2006, but by that stage the NT beef industry was heavily aligned with live export, making the business unviable.

And to emphasise the current state of affairs in northern processing further, the Australian Agricultural Co’s Livingstone Beef abattoir south of Darwin remains closed. After $110 million worth of investment, the plant was shut permanently barely 12 months after it was opened in 2017, accruing large operating losses.

It beggars belief just how few beef processing resources remain in northern Australia, given the sheer size of the cattle industry across the region.

Here‘s a few points to consider:

• Some 45pc of the Australian landmass sits north of the Tropic of Capricorn, located just outside Rockhampton.
• According to the Federal Government’s Office of Northern Australia, the region above the Tropic of Capricorn contains around 10 million cattle
• North of the city of Rockhampton, just three significant Australian export beef processing plants operate: NH Foods’ Borthwicks at Mackay, JBS Townsville and the privately-held and supplied Signature Beef plant near Clermont.