Forecasts for New Zealand’s tanning are good after the merger

Forecasts for New Zealand’s tanning are good after the merger

Forecasts for New Zealand’s tanning are good. There have been a great deal acquisitions and sales in New Zealand over the last 2 years. And while at an earlier time companies were trying to get free of the business tied sub-products, they now are a focus for investments. All with the unfair promotion of vegan products as eco-friendly. In this case as well, something is changing.

Forecasts for New Zealand’s tanning

In an analysis published by interest.co.nz, consultant Allan Barber (long career in the meat industry), reconstructs matters and considerations over New Zealand’s tanning segment. The entire system showed liveliness in the last few years with acquisitions and sales of entire companies or business units. But there have also been many new contracts signed. As shown by Barber, there are 5 large players in the meat industry: Alliance, AFFCO, Progressive Meat, Silver Fern Farms and ANZCO Foods. The first 3 companies have always had a BU dedicated to the byproduct (hide) of the mead industry, while the last two have outsourced operations to external companies. A choice that is dictated by the high costs that must be undertaken to work the animal leftovers. Raw material in other industries have had lowr prices for a while, unlike the past, where the income from that slide of the business was much more important.

Big three

The externalization of transformation activities for by-products has allowed other companies to develop. Today in New Zealand, as pointed out by Barber, there are 3 main players in the tanning segment: Glendenburg HoldingsLowe Corporation and Tasman Tanning. The first has 3 sites, the 2nd 6 and the 3rd is an international player that bases a good portion of its business on exports.

Reasons to be optimistic

Glendenburg Holdings has experienced strong growth from the time it started treating raw hides supplied by Silver Fern Farms in 2014. That being said, explains the manager, the contract could become the subject of a review, in coming months, that could upset the local tanning industry. What’s for sure is that, recently, the group has formed a business deal with slaughterhouses Greenlea Premier Meats and Wilson Hellaby to acquire the Waitoa tannery. This tannery is currently owned by Wallace, a joint venture created in 2017 from the collaboration of the other 2 large players: Wallace Corporation and Farm Brands. Yet, Tasman Tanning, other player of New Zealand’s tanning segment, has recently closed a large acquisition: Tasman took over 75% of New Zealand Light Leathers’ capital, which is a part of meat operator Argent Group Europe.

Less is better

All the situations explained by Barber come from the segment’s tendency to aggregate in fewer players. In turn, they involve other partners that are part of the chain, at least as of lately. The 2 acquisitions completed by Tasman tanning and Glendenburg’s partners is a positive sign, onto which is added the direct participation of the two companies operating in the meat industry.

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