The Carrick mill south-west of Launceston in northern Tasmania was bought by Ridley this year. Photo: Ridley

AUSTRALIA’S largest stockfeed miller holds hopes to increase production at the mill it purchased this year in northern Tasmania, Ridley managing director and chief executive officer Quinton Hildebrand said in his address yesterday to the company’s annual general meeting.

“Not only will this feedmill enhance Ridley’s ability to supply dairy customers in Tasmania, but also in Gippsland, Victoria as it releases capacity at the Pakenham Ruminant Feedmill which has been supplying the Tasmanian market,” Mr Hildebrand stated.

He said a second shift has already been added at Carrick, and the $2-million capital expenditure to automate and de-bottleneck the site is under way.

“With the response from new customers interested in receiving quality feed from a local supplier, we are hopeful that we can take this feedmill from 12,000 tonnes per annum at acquisition to 60,000t per annum in the next few years.”

Ridley operates two business segments: bulk stockfeeds, and packaged feed and ingredients.

Carrick was purchased by the former, while Oceania Meat Processors was bought by the latter.

“Through the acquisition of these two businesses, we are deliberately learning and building capability, so that we can be prepared should other growth opportunities present.”

Efficiency pays off for bulk

Mr Hildebrand said the bulk stockfeeds segment in FY24 continued its “virtuous cycle”, using its integrated scale and capability to grow with existing customers, and win new ones.

“In an economy facing high levels of inflation, Ridley was able to partially offset cost increases to these customers by passing on savings from efficiency projects and by leveraging volume increases.”

Mr Hildebrand pointed to capital spent to accommodate this growth, which included de-bottlenecking projects for the Pakenham ruminant feedmill in Victoria and the Clifton monogastric feedmill in Queensland.

He also highlighted Ridley Direct, which in its second year of operation doubled its sales to now account for 6 percent of the bulk stockfeeds volume, a volume equivalent to that of an average-sized feedmill.

“This initiative provides opportunity to generate returns by leveraging our raw material procurement scale and making sales to customers with whom we have traditionally had no dealings.

“Overall, our bulk stockfeeds business has gained market share in a number of sectors and today we estimate that we feed one in four commercially fed animals in Australia.”

Mixed bag for packaged segment

Within the packaged feeds and ingredients segment, Mr Hildebrand said the ingredient recovery business continued to “climb the wall of value” by extending its product offering and capability with the acquisition of OMP.

“OMP is a premium provider of mechanically deboned meat in frozen block form for the global petfood industry with operations in Melbourne and Timaru, New Zealand, and this opens the door for Ridley to access new petfood customers domestically and internationally.

“During the year, both ingredient-recovery facilities benefitted from increased raw-material supply with over half of these volumes contracted on multi-year agreements.”

Mr Hildebrand said Ridley’s integration of OMP has been progressing to plan following its acquisition in March, with construction of a new leasehold facility including a custom-built plant in Timaru on schedule to be completed by October 2025.

“This will replace the current leased facility in Timaru, enhancing the OMP product offering, lowering operating costs and providing capacity for future growth.”

As the largest renderer in Australia, and with a frozen block offering in Australia and New Zealand, Mr Hildebrand said Ridley had “unparalleled access to a range of meat-protein species” that provides a unique opportunity to service petfood manufacturers domestically and internationally.

“In support of this opportunity, we are building our petfood capability by hiring petfood expertise, so that we can deliver on the expectations of these customers.”

Ridley assets include two CSF Proteins, formerly Camilleri Stockfeeds, plants, one at Maroota in Sydney’s outer north-west, and the other in Laverton in Melbourne’s west.

Mr Hildebrand alluded to a positive impact at Ridley’s CSF Proteins rendering plant at Maroota from the closure due to urban encroachment of AJ Bush & Sons’ longstanding Riverstone operation.

“The Maroota facility…experienced a significant uplift in volumes following the closure of a nearby renderer, and the business is now working through the capital expenditure options to optimise returns.”

Mr Hildebrand said the packaged products segment continues to develop new lines for the rural market.

“During FY24, the poultry feed range branding was refreshed and smaller pack sizes introduced for the peri-urban market.

“In addition, the new packing facility in Narangba, Queensland was completed in December 2023, automating the packing of smaller pack sizes in the petfood range.”

Mr Hildebrand said the aquafeed sector had underperformed, and Ridley has relinquished some low-returning aquafeed sales, as well as combining the aquafeed and NovaqPro business units to prioritise servicing of the prawn market and commercialising NovaqPro.

“The Narangba extrusion facility was restructured in the second half of FY24 from a seven-day operation to a five-day operation, and we now have extrusion capacity to pursue petfood growth opportunities.”

Sustainability offers opportunities in solid year

Mr Hildebrand said the company’s overall results in the year to 30 June 2024, as released in August, were solid, despite some challenging market conditions.

“We were put to the test, with lower broiler chicken feed demand due to industry breeding constraints, a falling tallow price with the delay in the construction of renewable diesel plants in the US, an outbreak of Avian Influenza in Australia, and general inflationary cost pressures.”

Ridley sees the increasing requirements around sustainability as an opportunity for the business to gain a potential competitive advantage in our sector.

In FY24 the Ridley Innovation and Operations Committee transitioned into a Sustainability Committee to provide strategic oversight on sustainability and climate-related risks and opportunities.

The company published its first stand-alone sustainability report last month, and its initiatives include an upskilling of its nutritionists in Life Cycle Assessments so customers can be given options with regard to greenhouse-gas emissions in their feed supply.

Mr Hildebrand also noted Ridley’s 4.4pc reduction in its carbon dioxide emissions per tonne of finished product through the delivery of energy efficiency capital projects.

“By being focussed on the right things, we believe that we are making a difference for the environment and the communities we operate in, while ensuring profitable outcomes for our customers and Ridley.”

Source: Ridley