Packer company closes meatworks
CNN Asia Business Editor
SYDNEY, Australia (CNN) -- Australia's second largest meatworks has closed, putting 700 people out of work.
It was owned by media and gaming tycoon Kerry Packer's Consolidated Press Holdings (CPH).
The Lakes Creek meatworks at Rockhampton, the self-proclaimed "beef capital of Australia" on the central Queensland coast, had been the scene of extended industrial dispute over working conditions.
The closure comes as drought conditions and reduced overseas demand for Australian meat push the industry towards consolidation.
CPH took full control of Lakes Creek's owner, Consolidated Meat Group (CMG), in July 1999 and said it aimed to make the company Australia's leading supplier to the global beef market.
But the downturn in demand from Japan after the first discovery of mad-cow disease there last year, combined with high cattle prices and operating costs, saw the meatworks run up heavy losses.
CMG executive chairman Ray O'Dell told CNN on Tuesday that Lakes Creek had proved to be an "uneconomic concern" and was therefore being closed down.
He said this was despite heavy capital spending on the plant.
Lakes Creek has been embroiled in industrial disputes after it failed to resume work in January following the normal Christmas-New Year shutdown.
The plant finally re-opened in early May, with a reduced workforce. But workers again went on strike last Thursday over employment conditions.
On Monday the company gave the Australasian Meat Industry Employees Union six weeks' notice that the plant would formally close on September 4.
O'Dell said CMG, which has other abattoirs, is now in the process of restructuring its operations and hopes to form a joint venture with another meat processor, Teys Holdings. Teys has abattoirs in southern Queensland and South Australia.
He said CMG and Teys now ranked third and fourth among Australian meat processors, and a joint venture would take the combination into second position.
Lakes Creek has been one of the biggest employers in central Queensland. Union representatives say finding work for the meatworkers will not be easy.
O'Dell said the plant would be mothballed, and there were no plans to re-open it.
Packer is Australia's richest man, with a fortune estimated at $3.2 billion (full story). He controls unlisted CPH, which in turn fully owns CMG.
CPH also operates Packer's other cattle interests through its subsidiary Consolidated Pastoral Group, Australia's third largest pastoral company.
Packer's main listed vehicle, Publishing and Broadcasting Ltd (PBL), closed 0.22 percent lower Tuesday at A$9.10 on a day when the overall market, measured by the S&P/ASX200, rose 1.6 percent.
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