Wednesday, March 6, 2013

Hopes for future of Saputo cheese factory in Newcastle Emlyn

TALKS have been held with companies interested in taking over business from the troubled Saputo cheese factory in Aberarad, Newcastle Emlyn.

It was revealed last week that 70 jobs are under threat at the firm after the Canadian owners announced they intend closing the factory after a 30-day consultation.

Assembly Member Rhodri Glyn Thomas has been in talks with the Welsh Government and many of the companies to find a buyer.

He said today: “Since Saputo entered a consultation with its staff regarding closure of the factory, I and my office have had several conversations with both farming unions and with parties interested in the site.

“This is very encouraging and I will continue to monitor the progress of these discussions with a view to securing the future of the factory and its employees.”

The news that Saputo intends closing the Newcastle Emlyn factory was met with shock last week. The company stepped in to buy the factory in 2006 from Dansco.

However, it said the business was no longer profitable and it has also closed another factory in Germany.

Tuesday, October 30, 2012

Takeover targets: who's next?

THE surprise swoop on NSW-based grain giant GrainCorp by US farm commodity company Archer Daniels Midland is setting the scene for a rash of new big-scale takeover interest in what's left of Australia's major agribusinesses. 

Stockbroking and financial advisory firm RBS Morgans not only tips more global food traders/processors will vie for GrainCorp's strategic assets, but says similar players are set to pounce on local farm chemical and plant breeding success story Nufarm and fertiliser and explosives business Incitec Pivot. 

Victorian-based dairy processor Warrnambool Cheese and Butter will "inevitably be involved in industry consolidation" as strong offshore interest, particularly from Asia, looks to secure Australian dairy supplies.
A raft of high profile agribusinesses to fall to offshore buyouts in the past five years has included dairy company National Foods, big grain businesses ABB and AWB, sugar processors Tully, Sucrogen and Maryborough Sugar Factory and farm supplies and selling agency firm Landmark. 

Next wave targets are likely to be Treasury Wine Estates (TWE), stockfeed company Ridley Corporation, big beef producer Australian Agriculture Company (AACo) and corporate farming business PrimeAg, all of which already have strong overseas investment interests on their books. 

Australia's oldest cotton company Namoi Cotton and cotton and grain producer Tandou were already looking at overseas options for big injections of new capital investment. 

"We expect further takeover activity in the agricultural and food sector given that all the corporate movement so far says a lot about the positive outlook for agriculture," said senior RBS Morgans analyst Belinda Moore.
"Global wheat export trade has doubled in the past 40 years and the global trade of wheat barley and canola is expected to double again by 2050 driven by a 35 per cent population rise and a 13pc rise in per capita grain consumption." 

Ms Moore said Australian agriculture's appeal to global investors included its production quality, freight and food traceability advantages. 

"It is also the food bowl or gateway to Asia," she said.

"It's only a matter of time before the Chinese show corporate interest in TWE given the strong wine consumption growth in China."

Malaysian and Middle East investment partnership IFFCo/Felda already owned 16pc of AACo and despite local milk processors Bega Cheese and Murray Goulburn's stakes in WBC, its highly efficient position in the export trade made it "very attractive" to long term overseas interest.

Japanese commodity conglomerate Sumitomo already owned 23pc of Nufarm and "seems to be a logical buyer" in the future.

Incitec Pivot would attract strong corporate interest given it was the fertiliser market leader with 60pc of the eastern Australian market.

According to the Rural Industries Research and Development Corporation foreign investors now own half of Australia's 23 licensed wheat exporters, half the country's milk production (via Fonterra, Lion, Parmalat), 60pc of raw sugar production (via Finasucre, Wilmar and COFCO) and 40pc of red meat production (via JBS, Cargill and Nippon Meat Packers).

But while foreign takeovers had some costs for the local farm sector Australian Farm Institute executive director, Mick Keogh said our export-focused farm sector had long history of relying on capital from offshore to bankroll many of big agribusinesses.

Among the biggest concerns he foresaw with overseas companies gaining near-monopoly positions in the grain sector was Australia's lack of market pricing and stocks transparency.

"I'd think people would like to be reassured that they'll be dealing with a fair and transparent trade, which means we need better information available to sellers and buyers," Mr Keogh said.

He noted trading transparency was better in other sectors, including the equities market, while US farmers had access to far better price and crop forecast data - and a longer harvest - which helped them make informed trading decisions.

"It's a shame our agricultural companies haven't been able to grow a lot bigger as international players, but by and large Australians seem fairly comfortable with the idea of overseas ownership - it's been part of our lives for so long," Mr Keogh said.

"At the turn of last century we had a lot of meat export and production investment from Britain and Europe with groups such as William Angliss and Vestys, then we started exporting to the US, so American companies were prominent.

"The Japanese emerged in the 1970s in the meat and wool sectors, then Korea, now China and other Asian and Middle Eastern countries are strong investors in sugar and meat as they've come to rely on our markets."


Thursday, October 27, 2011

Curry Parmesan: Sikhs rescue Italy's famous cheese

A master in the art of making Parmesan cheese, Manjit Singh is part of a large community of Sikhs in northern Italy who are shoring up an industry under threat of extinction.

Since moving from India seven years ago, the former taxi driver has become the main cheesemaker in a small family-run factory that produces thousands of rounds of the world-famous cheese.

Many of Italy's 25,000-strong Sikh community originate from India's Punjab region but have found their calling producing Parmesan and prosciutto ham in Lombardy and Emilia Romagna.

Most are employed as dairy hands but some, such as Singh, are taking over key roles in preparing the sharply flavoured hard cheese grated onto pasta dishes and shaved into salads the world over.

"I looked for any work when I first arrived, even as a dishwasher. I was ready to do anything, but I like being a cheesemaker a lot," said the 34-year-old father of two. Graziano Cacciali, who runs the Parmesan plant in Zibello, took Singh on as help in 2004 after undergoing a heart bypass operation and said he has enjoyed teaching him skills that Italians were no longer prepared to learn.

"There aren't Italians in the industry any more. Making Parmesan means long hours: you have to work weekends, holidays, every day of the year. Italians have money and the young won't do the job any more," he said.

"I've stayed because I'm passionate about it, you have to be," said the 71-year-old as he supervised Singh stir vat after vat of slowly heated cow's milk, breaking up the curds with a huge, unwieldy whisk.

"We're really lucky to have found foreigners to milk our cows".

At the dairy in nearby Novellara, which specialises in producing milk for making Parmesan, half the labourers are Sikhs, prized as methodical, hard workers who are eager to fill the posts that open as Italians desert the industry.

By Italian standards, the money is very good too, with Sikh cheesemakers earning up to 2,000 euros (USD 2,800) a month.

"Most of our workers are Indian," said farmer Stefano Gazzini. "They are more dedicated to their work. They seem to have integrated well into the community, and even have their own temple."

The first Sikhs arrived in the region at the end of the 1980s. While a few opened their own import-export businesses, many found work in cattle farms or cheese factories – and tasted Parmesan for the first time, Singh said.

Tuesday, August 2, 2011

A broken vow, and wasteful excess, on business subsidies

Ah, summer.

It’s the season of lakes, loons, lazy days and, of course, federal ministers doling out pork across the land.

There are almost too many announcements to keep track of these days.

Here’s a sampling of just one day’s work by the Harper cabinet last week:

Transport Minister Denis Lebel hands $225,000 to the Gatineau, Que., hot-air balloon festival as part of an effort to “raise the visibility of Canada’s attractions on the international stage.”

Treasury Board President Tony Clement drops into the Thornloe Cheese Factory near New Liskeard, Ont., to hand out $1.2-million to a smattering of local small businesses.

Revenue Minister Gail Shea attends the opening of a new tourist attraction in Cap-Egmont, PEI, called the Bottle Houses – a clutch of small structures built entirely of empties – to check in on last year’s $49,000 federal grant. A sum of $49,000 apparently buys a lot of empties.

Earlier this month, Ottawa gave a total of $2-million to a New Brunswick doughnut maker and a Quebec coffee roaster – in both cases, so the businesses could buy new equipment.

The summer spending smorgasbord is a time-honoured tradition, gleefully practised by successive Conservative and Liberal governments.

What’s different is that Stephen Harper once vowed to end the practice. He even ran an election on it, promising to get out of the business of business subsidies.

Campaigning in Toronto in 2004, Mr. Harper challenged the business community to stop receiving government subsidies, making it a condition of lowering business taxes.

“I won’t lower one without lowering the other,” Mr. Harper assured members of the Toronto Board of Trade. “That is what I mean by low-tax solutions rather than high-spending solutions.”

It hasn’t quite worked out that way. Once in government, the Conservatives cut the corporate tax rate from 22.5 per cent to 16.5 per cent, with a further reduction to 15 per cent slated for next year.

Business subsidies weren’t cut. Instead, they soared, partly as a result of the government’s Economic Action Plan, designed to offset the impact of the recession.

Even the regional development agencies – the Atlantic Canada Opportunities Agency, the Federal Economic Development Agency for Southern Ontario, the Economic Development Agency for Quebec Regions and Western Economic Diversification Canada – are still in the subsidies business in a big way. The agencies will hand out more than $1-billion this year, with a chunk of that money going to businesses that could, and probably should, be getting the money from their local banker.

Governments insist repeatedly that these kinds of subsidies are good economics.

“Our government continues to support Quebec producers, driving the economy and helping them access new markets,” Industry Minister Christian Paradis said as he gave Montreal coffee roaster and retailer Van Houtte Inc. $1.8-million to buy equipment. The “repayable contribution” comes from a special fund to help agrifood processors modernize.

Ottawa’s inability to kick the subsidies’ habit is more about politics, and demonstrating that Ottawa has a direct role to play in the economy.

If these businesses are viable, they should be getting the money privately. The government’s involvement merely crowds out private lenders and transfers risk to Canadian taxpayers.

Governments need to be far more strategic about how they spend money, particularly as they work to eliminate swollen budget deficits incurred during the recession.

In his recent budget, Finance Minister Jim Flaherty vowed to “improve the efficiency and effectiveness of government operations” and get “value for taxpayers” as he pursued spending cuts.

The summer pork parade suggests otherwise.

If Canada had a budget surplus and there weren’t other more crying needs, maybe the spending wouldn’t seem so glaringly wasteful.

But that’s not the case. Access to family doctors and specialists remains inadequate in much of the country. Common shared infrastructure, such as roads, bridges and sewers, is crumbling and requires every dollar Canadian taxpayers can afford. And businesses aren’t investing enough in productive R&D.

It’s about choices.

Surely, Canada’s economy of the future isn’t about balloons, cheese, bottles, coffee and doughnuts.

Wednesday, March 30, 2011

Cheezburger cats swallow Know Your Meme

And the Cheezburger empire continues to expand. According to Marc Hustvedt over at tech site Tubefilter, Cheezburger Network – the meme factory behind sites such as The Daily What, Fail Blog, and flagship I Can Has Cheezburger – has acquired Know Your Meme, a Web series which investigates various Internet trends. (If this all sounds like a lot of Cheez, check out this helpful explainer about the Golden Age of the Internet Meme.)

"There was a vacuum in our publishing portfolio," Cheezburger founder Ben Huh told CNN today. Huh did not discuss specifics, but Cheezburger Network is said to have forked over something in the area of low seven figures for Know Your Meme. That's a lot of cheezburgers.

"Before diving into the sale, I entertained another serious buy-out offer, entertained an offer for investment from a premier investor," Know Your Meme founder Andrew Baron wrote on his blog, "and even considered turning it into a 'double bottom line' company, but all in all, everyone advised and I agreed that this was by far the best deal to be done (esp. because I was 100% owner of the company with no other investors or partners involved)."

Baron said he cleared the idea with his staff, and "got everyone’s complete conviction." According to TechCrunch, all the members of the Knew Your Meme team – save Baron himself, who will remain at video blog site Rocketboom – will be moving to Cheezeburger HQ.

Tuesday, March 15, 2011

Local man becoming a big cheese

A cheesy post-graduation idea has become a reality for a local entrepreneur.

Upon graduating with a business degree from a liberal arts university in Iowa, Shep Ysselstein had a quick-witted response for everyone who asked the predictable question, "What are you going to do now that you're done school."

"I told people, I'm going to go make cheese," the 28-year-old Norwich Township man said Tuesday, following a funding announcement at the site of his new factory.

Ysselstein received a $250,000 loan from the Sand Plains Community Development Fund to help get his cheese factory, Gunn's Hill Artisan Cheese, up and running.

The 560-square-metre cheese factory located on Gunn's Hill near Highway 59 in Norwich Township is expected to be complete by June, with the first wheels of cheese rolling off the production line as early as August.

"Telling people that I was going to open my own cheese factory was just something funny to say at first, but then it became a thought. The more I thought about it the more I liked the idea. But I soon realized I was just being young and crazy and didn't know anything about making cheese, so I decided to go learn."

Ysselstein first took classes teaching the art of making cheese at the University of Guelph and then the University of Vermont.

He describes artisan cheese making as a unique, small-scale and hands-on process.

"When cheese is made industrially, we expect the same product made each time, but the milk that comes from the cows isn't the exact same everyday," he said.

"This more hands-on process allows me to work with that and make the best flavours I can all the time. It's very much like soup made in factories in a large scale. They use the same ingredients, it tastes the same, but everyone always prefers the homemade soup you make right on your stove."

After learning the basics in class, Ysselstein was looking for a more active approach to learning his cheese-making skills. He spent three months in up-state New York working at a small cheese factory. And with luck on his side, the young man with cheese wheels instead of stars in his eyes ended up working with someone heading off to make cheese in Switzerland – a Mecca for cheese lovers.

He spent the summer learning and perfecting Swiss cheese-making techniques passed down for hundreds of years.

"We made cheese the same way they did 500 years ago. Farmers got together and sent cows up into the mountains. We used fire to heat the milk. We milked the cows morning and night, and turned the milk by hand to make the cheese. It was a lot of work, but so beautiful," he said.

Following the summer, Ysselstein got a job making cheese on Vancouver Island at Natural Pastures Cheese Factory. He spent nine months learning the ropes at the factory before coming home to Oxford County to start making his own dream a reality.

"I could have stayed on Vancouver Island, but in the end, I wanted to get going on my own," he said. "I knew the whole time I was out learning that I wanted to build a business here at home."

Ysselstein spent two years learning about regulations before construction started on the estimated $1-million cheese factory. The factory was designed with a viewing area so that visitors can watch how cheese is made. Visitors will also have the chance to tour the pastures where the cows that make the milk for the cheese are grazing.

Three different cheeses will be made using milk produced on the farm of John and Helen Ysselstein, the cheese maker's parents.

"With five brothers, there had to be ways to diversify the farm," he said. "I love the farm but I don't feel like milking cows for the rest of my life. I like being outside, but also like doing office work. This is a perfect fit."

Oxford MP Dave Mackenzie agreed the new factory was a perfect fit – not just for the Ysselstein family, but for Oxford County.

"This adds one more dimension to agriculture and to tourism in Oxford," Mackenzie said. "This is the kind of thing people search out. You can't just pick up this kind of cheese anywhere. People will know about this shop throughout this part of Ontario and will travel to get some of Shep's high quality offerings."

Ysselstein plans to start making cheese at the plant as soon as construction is complete. The three types of cheeses being made have different aging processes, but the first samples are expected to be ready in August. He guessed more than 60,000 kilograms of cheese will be made in the factory per year once it's fully operational.