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Meaty deals add strength to Thomas Foods' core business

Business

Thomas Foods International is sharpening its focus on its core meat business following two major deals announced in the past week.

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On Tuesday, the SA company announced it had agreed to sell its potato business to Virginia-based Mitolo Family Farms. In what it says is an unrelated move, two days later TFI announced it had acquired a 50 per cent stake in the Victoria-based Frew group, which owns a modern meat processing plant in the western Victorian town of Stawell.

Based in Adelaide, TFI owns meat processing plants in Tamworth and Lobethal along with its soon-to-be rebuilt Murray Bridge plant and is Australia’s largest 100 per cent family-owned meat processing company.

TFI has annual turnover of more than $2 billion, employs 3000 people globally and exports about 80 per cent of mainly beef and lamb production into 80 export markets.

It owns subsidiary companies located in Asia, Europe and the United States, where it operates a state-of-the-art foodservice and storage facility New Jersey.

The Frew meat processing company, now renamed Frew International, was established in 1984. Its Stawell meat processing facility has daily capacity to process more than 6000 lambs, sheep and goats sourced through saleyards and directly from farmers across eastern and central Australia.

Under the partnership, both companies will continue to operate independently with Robert Frew remaining as Managing Director of Frew International and TFI CEO Darren Thomas joining its Board as Executive Chairman to help guide global growth and future strategy.

Thomas said the investment into Frew provided great benefits to both family-owned companies over the long term and in particular to Frew’s longstanding livestock suppliers and customers.

“Both companies have had a mutual respect for each other over many years,” he said.

“For us, it was important to partner with a company that has a similar focus on quality and running a business based on strong family values.

“This investment is not only aimed at helping facilitate Frew’s exciting growth prospects but also enhancing TFI’s offering across the meat industry including some of Frew’s existing key markets that TFI has not served in recent years.”

The new corporate structure takes effect from July 1.

Frew said the partnership would benefit the company’s customer relationships, commitment to service, quality, team and community under the new Frew International banner.

“Our well-established and focused national retail domestic customer relationships and export markets, in particular the Middle East, will benefit substantially through combining our increased procurement, supply chain, access to markets and processing volumes,” he said.

TFI has also used the past few months to ramp up its online sales presence under the Thomas Farms retail brand.

The company’s meat focus will also be boosted by the construction of a world-class abattoir at Murray Bridge after its previous meatworks was destroyed by fire in 2018.

The new facility is set to include robotic precision cutting equipment, dual energy x-ray and an industry leading 3D scanner.

As TFI strengthens its meat-producing arsenal, it is scaling back on its non-core operations with the sale of its potato business to Mitolo Family Farms.

The Thomas Foods International potato operation and Mitolo Family Farms are both based in Virginia, north of Adelaide.

South Australia grows 80 per cent of the nation’s potatoes with Mitolo among its biggest players.

Managing Director Frank Mitolo said the acquisition represented an opportunity to increase capacity and business continuity for packing and grading fresh produce in the Virginia region and to future proof the business through additional farming and water assets.

The sale is still subject to ACCC approval.

TFI purchased potato producer Mondello Farms after the Virginia-based business went into administration in 2013 and has since grown the business under its Thomas Foods International Fresh Produce division.

Thomas said the sale would allow TFI to focus on its core meat business.

“We’re proud of what TFI Fresh Produce has achieved over the past 7 years with potatoes, reviving a business and rebuilding it into a profitable major industry player,” he said.

“By utilising the TFI group’s global sales network, TFI Fresh Produce has built a substantial export business for potatoes and other related produce.

“It’s now timely to divest these potato interests and focus on our group’s core local, national and global operations where we see exciting growth prospects including potential future acquisitions, the rebuild of the Murray Bridge meat processing plant and other produce opportunities.”

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