Allan Barber assesses to prospects for the ANZCO business as it absorbs the specialist Geenlea operations

It can’t be a coincidence since Itoham Yonekyu bought out ANZCO’s minority shareholders, including founder Graeme Harrison, in 2018, ANZCO has made a profit every year. Of the meat companies that publish an annual result, it is the only one to have been consistently profitable, even in a difficult year.

The 2019 result, the first full year in Itoham ownership, signaled a massive performance improvement after a $38 million pre-tax loss the previous year. At the time CEO Peter Conley acknowledged the more favourable trading environment, but attributed most of the improvement to business simplification, restructuring and the introduction of a new sales and operations planning system. This enabled much better matching of livestock supply to customer demand with the consequent reduction in inventory, shipping and storage costs.

At the time I noted it would be difficult to post a repeat result the following year, but the company achieved higher profits in each of the next four years, rising from $30.6 million in 2019 to $156.4m in 2022. Since that peak performance profitability has eased somewhat, although the 2025 calendar year has produced a solid $55m pre-tax profit according to information released to the market by Itoham Yonekyu at the time of the Greenlea purchase announcement.

ANZCO’s financial year has been changed to a March year end, so full results for the fifteen-month period won’t be available until September. The acquisition of the Greenlea business will turbocharge ANZCO’s turnover and profits. Turnover will see ANZCO rival Silver Fern Farms as the country’s largest publicly disclosed meat exporter and its profit will comfortably exceed $100 million at the pre-tax level.

It remains to be seen whether SFF can come anywhere close to achieving a similar degree of profitability with its more complicated and people intensive business strategy. Its stated goal is to achieve EBITDA of $1 billion by 2030, although the enlarged ANZCO Group may well come closer than its competitor.

The acquisition is a strategic move by the combined Itoham Yonekyu business as it looks to diversify and expand beyond its core meat and processed meats product range. Itoham Yonekyu has recently reached the 10 year milestone during which period it has seen strategic integration of the two component businesses enabling it to consolidate operations, streamline logistics and enhance its competitive position in its domestic market.   

It now seeks to expand its international footprint through strategic partnerships and merger and acquisition. Using ANZCO as a firm foundation in New Zealand, the addition of the highly efficient and profitable Greenlea operation is a significant step in this direction.

It will be interesting to see how ANZCO integrates Greenlea into a single company, although for the time being the two units will operate independently under separate boards. There is not a great deal of difference between the recent profit performance of the individual companies, although Greenlea as the smaller unit appears to be more consistent.

Greenlea is a smaller business with less complexity (less plants, beef only), although it has joint venture rendering, tannery and protein operations at Waitoa in partnership with Wilson Hellaby and Glendenburg Holdings. Its return on sales and, presumably, assets is superior to ANZCO’s whose turnover is more than three times as great.

The challenge over time will be to maintain Greenlea’s performance while integrating its systems, sales and marketing activities to achieve the parent company’s strategic objectives.