AUSTRALIA’S largest dedicated grainfed beef processor, Queensland’s Kilcoy Pastoral Co, is in the final stages of a strategic business transition from being simply a ‘beef abattoir’ to becoming a ‘global premium protein solution provider.’
Described by the company as an organisational integration, the new entity, Kilcoy Global Foods, will have oversight for integrated company operations in Australia, the United States and China.
Laying the foundations for the move, Kilcoy’s owner, Hosen Capital, has made substantial business acquisitions in North America and Asia over the past few years, outlined below.
“We’re moving away from simply being a processor – putting meat in a box and selling it,” Kilcoy Pastoral Co chief executive, Dean Goode told Beef Central. “The business now is about food chain solutions, security of supply and adding value for the customer and the supply chain,” he said.
As part of the transition to global operations, Mr Goode has taken on additional responsibilities as CEO of Kilcoy Global Foods, with oversight of processing, value-adding and sales/distribution operations across the businesses in Australia, the US and China.
He said recent investment meant Kilcoy Global Foods was now equipped with a modern, highly-efficient and large-scale grainfed beef processing plant in Australia, and end-to-end supply chain capability to service the US and Chinese markets. The recent business acquisitions had also provided access to advanced product research and development capability in both North America and Asia.
“It’s about harnessing the strengths of each business to establish a value-added network of protein producers, processors and suppliers,” Mr Goode said. “This international network is now uniquely positioned to add value at each stage of the food journey, underpinned by assured, reliable supply.”
On the supply side of the broader Kilcoy Global Foods project, significant investment has been directed into the company’s southern Queensland processing facility, designed to increase volume and efficiency. The plant currently processes around 400,000 grainfed cattle each year, directed into more than 20 export destinations. Beef Central will feature the recent, impressive plant upgrades in a separate story in coming weeks.
Staged process to integration
The transformation now taking place had its origins when Hosen Capital bought the Kilcoy processing facility from Singapore’s Harmony Group in December 2013.
A year later, the company bought the large and well-established Ruprecht further-processing business in the US. Ruprecht’s main business is value-adding red meat in various forms through to fully-cooked meals, and portion-control steak cutting operations.
The acquisition made strong strategic sense, as prior to the deal being struck, Ruprecht was Kilcoy Pastoral Co’s single largest beef customer in North America, trading indirectly through a US importer. Ruprecht’s large customer base includes major national US meat retailers like Costco and Trader Joe’s, and food service clients such as Tony Roma’s steakhouse chain, operating 150 restaurants in the US and 25 other countries. Tony Roma’s was one of the first US chain restaurants to expand into the international market, opening its first store in Japan in 1976.
Ruprecht is one of the oldest surviving beef companies in the US, established in 1860. Today, the company turns over up to US$200 million each year. Since its purchase, Kilcoy Global Foods has injected a further US$25 million into Ruprecht’s operations, expanding the company’s cooked products business threefold.
While most of Ruprecht’s business is US-domestic focussed, it also has export capability.
China investment follows
In late 2015, Kilcoy Global Foods made another important strategic acquisition, buying Weidao Food Company, a value-adding, portioning and distribution business in Waihai, China. Weidao Food makes a wide variety of meat protein-based value-added products, is a leading supplier to both global restaurant chains in China and premium Chinese restaurant businesses.
Previously, Kilcoy sold all of its export product into both the US and Chinese markets to importer ‘middle-men,’ but since the recent Weidao and Ruprecht acquisitions, now operates integrated import/distribution businesses in Shanghai (KPC China) , and the US (KPC USA).
The investments in value-adding and distribution are seeing a growing proportion of the Kilcoy meat plant’s production directed into these programs. About 20-25pc of the plant’s production now goes to China, through the company’s own business (either value-added or wholesaled). In the US, the proportion directed through Kilcoy’s own channel is also growing rapidly.
While much of the focus in Kilcoy Global Foods’ value-added operations is happening overseas, the value-added capability at the company’s Kilcoy (Qld) beef processing plant is also expanding, including more portion-cutting of steaks for export markets like China, and retail and food service work in Australia.
Committed shareholders
Kilcoy’s shareholders include Hosen Capital, a private equity investment firm based in Beijing; New Hope Group, one of the largest Chinese Good and Agriculture conglomerates; and several other international institutions.
“Globally food service operators and large retailers are striving to provide their customers high quality healthy food,” Alex Zhang, a partner with Hosen Capital, and chairman of Kilcoy Global Foods told Beef Central.
“Kilcoy Global is in a unique position to develop innovative products, powered by its superior supply chain integration, to further enable our clients to upgrade their offerings,” Mr Zhang said.
“We support management’s vision and are committed to develop Kilcoy into a global leader in this field,” he said.
Further investments?
Beef Central asked Kilcoy Global Foods CEO Dean Goode if there was more to come in the company’s evolution towards becoming a ‘global premium protein solution provider.’
“Absolutely,” he said. “We will continue to look for business opportunities that fit well with the model.”
He drew an analogy from the energy and resources industry, describing the Kilcoy Pastoral Co beef processing plant and its strong relationships with commercial feedlot operators across Queensland and NSW as the ‘oil well’; and the value-adding businesses in the US and China as the ‘refineries.’
“It may be that we also expand the ‘refinery’ work here in Australia,” he said.
About the new Kilcoy Global logo:
As part of the company transition, a new Kilcoy Global Foods company logo has been devised. The existing Kilcoy Pastoral Co name and identity will continue to be used for processing-specific purposes, but the broader company will adopt the new identity. The logo image, pictured here, not only carries a landscape/environment theme (water, mountains and blue sky) but also incorporates the letter ‘K’ into its structure. The new logo will be used for corporate operations only at this point, but may one day find a home on some cartons and vacuum-packed bags from the Kilcoy Pastoral Co plant north of Brisbane.
The name, Kilcoy Global Foods, pays due homage to the small band of producer shareholders that formed the original Kilcoy Pastoral Co processing business 65 years ago, proudly exposing the tiny rural country Queensland town’s name to the world.
Coming up in Beef Central:
Major investment in Kilcoy meat processing assets as part of global shift
Evolution happening in Kilcoy branded beef programs.
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