Silver Ferm Farms

[DarkHorse]

Do you have some idea whether the upgraded plants will be much cheaper to run (like replacing my ancient Honda with a plug-in hybrid last year), or just necessary capex to replace machinery on its last legs?
And if most the the processing sites are almost up to scratch now, or a lot of obsolete equipment remains in place?

[percy]

From memory $30mil then $50mil and $60 mil over the last three years has been spent.
Yes a lot would be to replace equipment that was past its best used by date,but other capex such as the marshalling floor at Pacific ,have been done to increase productivity.
The last year saw some significant milestones in the company’s industry-leading sustainability programmes. Investment in initiatives such as Net Carbon Zero beef and in infrastructure such as the Marshalling Floor at Pacific reflect the core of our market-led strategy.


From my last post I repeat what their goal is.:
"While we still have some way to go yet, we’re confident that the direction we are travelling in will translate into higher returns for what we produce and a more positive outlook on the sector for our farmer suppliers."

I think 3 or 4 year's ago a lot of SFF's plants would have looked like your old Honda,however today they would be more like your plug in hybrid.

[percy]

From one of Simon Limmer's fortnighty updates.
http://link.silverfernfarms.com/c/6/...okRvRxVv9B6GQw

[Sideshow Bob]

Do you have some idea whether the upgraded plants will be much cheaper to run (like replacing my ancient Honda with a plug-in hybrid last year), or just necessary capex to replace machinery on its last legs?
And if most the the processing sites are almost up to scratch now, or a lot of obsolete equipment remains in place?

I haven't seen any details of the CapEx in recent years, apart from what has come out in newsletters/media etc. While it is a bigger amount than the dividend, I don't recall seeing anything detailed in any (Coop) annual reports.

Expect that some is replacing ageing infrastructure/equipment, with no or little additional benefit to it. Eg replacing coal boilers with more eco-friendly options. There are some subsidies to assist, and bit of feel good news, but unsure on the cost benefit/return.

Their plants are a mix, some are relatively new or gone through modernisation in recent years (eg Te Aroha burnt down and brand new plant built about 8-9 years ago, or Takapau which had a big spend a number of years ago) and some that are old, historic sites like Belfast, Pareora and Finegand which are 100+ years old. Some old structures, but sub-structures have been modernised through the years.

Going back in time, prior to Shanghai Maling, would say that not much was spent on CapEx, and when the debt noose was lifted, then there would have been some catch-up from the years where they probably spent little. That should be well past now, as been about 6 years now?

Would expect there would be more mechanisation/labour saving/energy saving - as not just for the cost of labour, but just can't get labour in many areas. Also expect would be a portion geared towards H&S.

Long way of saying I don't know!! Expect that does go through a reasonable amount of rigour, although they have spent a bit on HQ I hear, to accomodate the growing team.....