THE Hilton Food Group (HFG) will take full operational control of the Bunbury Meat Centre from July 1, after HFG and Woolworths Group LTD announced an agreement to restructure their Australian meat processing joint venture.
The Bunbury Meat Centre has a maximum plant capacity of 600 tonnes per week and produces beef, pork and lamb, as well as value-added products like sausages, rissoles and mince.
Woolworths opened the expanded Centre in 2012 – to a cost of $31 million – in order to meet the growing demands of WA consumers.
The agreement last week included the control of the Truganina, Victoria, plant as well as long-term contracts for Hilton Foods Australia (HFA) to supply Woolworths supermarkets with packaged and value-added meat products.
It is expected there will be a transitional period of two years, after which HFA will acquire the relevant plant assets for a book value expected to be $85m, for either cash or equity consideration (in the form of a minority equity stake in HFA).
There are no expected employment changes to be made to the existing 250 staff at Bunbury.
During the transitional period, HFG will also commission a new meat processing plant in Queensland.
This extension to the current partnership between the two companies will enable HFG to continue to service Woolworths across its expansive store network under long-term 15-year contracts.
HFA chief executive Robert Watson said they were “looking forward to welcoming the Woolworths employees in Bunbury and Truganina to our team”.
“We have been working closely with Woolworths for five years and we have a deep understanding and respect for each other,” Mr Watson said.
“Our long-term partnership with Woolworths is growing and this is the next phase of an even stronger relationship.
“The long-term contract between us displays the mutual trust we have in our partnership and Hilton looks forward to working with the Woolworths team to strengthen further our world class meat offer in Australia.”
Woolworths director of meat Pat McEntee said the company was “pleased with the value the current joint venture has created within its meat supply chain and is excited to extend the partnership with Hilton to deliver affordable, innovative and convenient protein choices for its customers”.
HFG announced in January, 2013 that it would enter into a joint venture agreement with Woolworths through a 50 per cent interest in a new company, Woolworths Meats Co Pty, to operate the Bunbury Meat Centre in WA.
In August, 2013, it further announced that it was to proceed with plans to construct a new meat processing facility in Victoria.
These plants have been operating for some time now as part of the Woolworths Meat Co, with all the operating assets currently owned by Woolworths.
In December, 2016 HFG announced plans to construct a new meat processing facility in Queensland, to supply Woolworths.
The facility will be owned by HFA, its 100pc-owned Australian operating company.
The facility is currently under construction.