AnnuAL RePoRt 2011 - Australian Meat Processor Corporation
AnnuAL RePoRt 2011 - Australian Meat Processor Corporation
AnnuAL RePoRt 2011 - Australian Meat Processor Corporation
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<strong>Australian</strong><br />
<strong>Meat</strong> <strong>Processor</strong><br />
<strong>Corporation</strong> Ltd<br />
Annual Report <strong>2011</strong>
CERTIFICATION<br />
On 2 November <strong>2011</strong> the AMPC Board authorised this annual report and confirmed that, to<br />
the best of the Board’s knowledge and belief, AMPC has complied in all material respects<br />
with the Agreement and the Act, for the year ended 30 June <strong>2011</strong>.<br />
Chairman<br />
Gary Hardwick<br />
Deputy Chairman<br />
Stephen Kelly<br />
Chief Executive Officer<br />
Directors<br />
Gary Burridge<br />
John Berry<br />
Brian Carey<br />
Brian James<br />
Mike Jackson<br />
Tom Maguire<br />
Peter Noble<br />
Michelle Edge<br />
THIS REPORT<br />
This Annual Report presents the <strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong>’s programs,<br />
outcomes and financial performance during Financial Year 2010-11. It comprises the<br />
following sections:<br />
• An Introduction: Reports from Chairman, Chief Executive Officer & Executives;<br />
• An About AMPC section which provides an overview of the Company, our strategic<br />
framework and investments;<br />
• A Report to Stakeholders that outlines AMPC’s performance across seven strategic<br />
imperatives, program highlights and progress for RD&E activities;<br />
• A Directors’ Report and Audited Financial Report.<br />
© <strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> <strong>2011</strong><br />
This work is copyright. Apart from any use permitted under the Copyright Act 1968, all rights are<br />
expressly reserved. Requests for further authorisation should be directed to the Company Secretary.
AMPC Annual REport<br />
Table of COntents<br />
Certification<br />
AMPC Vision 2<br />
aMPC at a Glance 3<br />
Chairman’s Report 4<br />
Chief Executive Officer’s Report 6<br />
Program Manager’s Report 8<br />
Member Services and Communication Manager’s Report 9<br />
About AMPC 10<br />
aMPC RD&E and Marketing Programs 13<br />
aMPC RD&E and Marketing Programs Map 14<br />
Report to Stakeholders Section 1: Increasing Productivity & Net Value 17<br />
section 2: Market Access is Maintained and Enhanced 25<br />
section 3: Product Integrity & Quality are 29<br />
Demonstrated to Consumers & Markets<br />
section 4: Driving Demand 32<br />
section 5: Sustainable & Responsible Processing 35<br />
Practices that meet Community Expectations<br />
section 6: Industry and Stakeholders are Engaged and Capable 45<br />
section 7: Continual Improvement 49<br />
Program Highlights – Plant Initiated Projects 2010-<strong>2011</strong> 51<br />
RD&E Collaborations 55<br />
other Highlights 58<br />
Director’s Report 64<br />
Corporate Governance Statement 68<br />
auditors Independence Declaration 71<br />
aMPC Key Financial Data 72<br />
Financial Report 73<br />
statement of Comprehensive Income 73<br />
statement of Financial Position 74<br />
statement of Changes in Equity 75<br />
statement of Cash Flows 75<br />
notes to the Financial Statements 76<br />
Directors’ Declaration 88<br />
Independent Audit Report 89<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 1
VISION<br />
A sustainable, profitable and<br />
competitive red meat processing<br />
industry that meets national<br />
and international customer,<br />
consumer and community<br />
expectations.<br />
2<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
AMPC AT A GLANCE<br />
The <strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong><br />
(AMPC) is the national Research & Development<br />
<strong>Corporation</strong> that represents the Red <strong>Meat</strong><br />
Processing Industry throughout Australia.<br />
AMPC’s mandate is to support Research,<br />
Development and Extension (RD&E) initiatives that<br />
are directed at improving the sustainability and<br />
efficiency of the meat processing industry.<br />
Red meat processor levies are strategically invested<br />
in RD&E and Marketing programs aimed at<br />
delivering improvements to the processing sector<br />
and providing significant benefit to the whole of<br />
the red meat industry and the broader <strong>Australian</strong><br />
community.<br />
MISSION<br />
AMPC’s mission is to maximise the efficiency,<br />
viability and sustainability of the red meat<br />
processing industry sector by supporting the<br />
development of sound, scientific solutions that will:<br />
• Improve the long term efficiency and<br />
competitiveness of the industry;<br />
• Enhance the sustainability of the industry;<br />
• Assist to protect, secure and maintain market<br />
access;<br />
• Enhance capability and;<br />
• Enhance overall productivity and performance<br />
of the meat processing sector.<br />
To achieve the above, AMPC supports projects<br />
in a wide range of areas including meat science,<br />
automation and technology, environment and<br />
sustainability, animal health, biosecurity and<br />
animal welfare, traceability and market access.<br />
AMPC focuses on:<br />
• Promoting <strong>Australian</strong> meat in the domestic and<br />
international marketplace;<br />
• Developing RD&E initiatives that address issues<br />
in meat safety, quality and product integrity,<br />
capability, environment, livestock management<br />
and other elements of the supply chain;<br />
• Establishing projects and capability that assist<br />
in protecting the economic, environmental,<br />
health, safety and social well-being of the meat<br />
processing industry.<br />
Organisational partnerships<br />
Industry research, development and adoption<br />
activities are conducted through a system of willing<br />
partnerships designed to deliver effective RD&E<br />
outcomes. AMPC participates in joint or core RD&E<br />
initiatives through a partnership with <strong>Meat</strong> and<br />
Livestock Australia Limited (MLA).<br />
AMPC works with Government to develop and<br />
deliver RD&E activities that underpin Australia’s<br />
National Research Priorities. AMPC also operates<br />
in partnership with the <strong>Australian</strong> <strong>Meat</strong> Industry<br />
Council (AMIC), to ensure that RD&E programs are<br />
directed at the areas of most strategic need for<br />
industry.<br />
AMPC works collaboratively with other<br />
organisations representing the broader red meat<br />
supply chain to ensure that processor collected<br />
levy funds are appropriately invested to deliver<br />
tangible results for the red meat Industry, rural<br />
Australia and for the nation as a whole.<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 3
CHAIRMAN’S REPORT<br />
Although the year has been challenging for the<br />
Industry, especially with natural disasters, a<br />
persistently strong <strong>Australian</strong> dollar and other<br />
market challenges, the Company is in a strong<br />
financial position, with current reserves at a<br />
level which will be able to comfortably meet its<br />
commitments. The revision of the AMPC Annual<br />
Operating Plan and the preparation for the<br />
development of a new Strategic Plan that will<br />
operate from <strong>2011</strong>, will assist to enhance AMPC<br />
investment and research direction.<br />
While essential to the output of <strong>Australian</strong> red<br />
meat industries, the processing sector faces<br />
particular challenges – from variations in flow of<br />
animals needed for economies of scale, to cost<br />
competitiveness in world markets, to issues in<br />
attracting and retaining employees.<br />
In meeting these challenges both Industry and<br />
AMPC have continued to invest in research &<br />
development, education and training. Specifically,<br />
significant effort has been directed at enhancing<br />
reporting and engagement of processor members<br />
and other Research, Development and Extension<br />
(RD&E) stakeholders, including Government, to<br />
identify priorities into the future. These engagement<br />
activities have included Strategic Planning days and<br />
events, regular workshops with members to identify<br />
needs and priorities, and a suite of evaluation<br />
activities and internal analysis of investments over<br />
the last 5 years. Outcomes that the Board have<br />
maintained focus on include the need to enhance<br />
delivery against challenges facing all members and<br />
a focus on priorities impacting smaller-medium<br />
members.<br />
AMPC has been working constructively with<br />
Government to finalise a new Statutory Funding<br />
Agreement. We are confident that these revised<br />
arrangements will accurately reflect the needs of<br />
the processing sector.<br />
Following the ARCHE Review of the Company, the<br />
AMPC Board and Management have been working<br />
diligently to tighten internal and external policies,<br />
build member engagement strategies and enhance<br />
the balance of the RD&E and Marketing portfolio<br />
and investment processes. These actions include<br />
enhancing reporting to members. The AMPC<br />
response to the ARCHE review will soon be made<br />
available to members.<br />
As reported last year, the Productivity Commission<br />
Review commenced to investigate the efficiency<br />
and effectiveness of all rural RDCs. An independent<br />
Company undertook the preparation of the<br />
submission on behalf of AMPC that was lodged<br />
in June 2010 and a further joint submission was<br />
made in December 2010, together with <strong>Meat</strong><br />
and Livestock Australia and LiveCorp. Since then,<br />
AMPC have directed effort towards its regular<br />
communication with Government on activities,<br />
processes and operations to ensure that as a<br />
major stakeholder of the company, Government<br />
is up to date on AMPC investment outcomes. We<br />
had several meetings throughout the year with the<br />
Federal Minister and members of the Department<br />
of Agriculture, Fisheries and Forestry on various<br />
matters regarding the Red <strong>Meat</strong> Processing<br />
Industry and AMPC.<br />
The AMPC has welcomed each of those reviews and<br />
with respect to the Productivity Review, AMPC looks<br />
forward to working with the Commission to ensure<br />
a better outcome for its investments.<br />
With this in mind, we have focussed heavily on<br />
strategic planning, with the support of the new<br />
CEO, Michelle Edge, and the outcomes of these<br />
discussions have assisted to better position AMPC<br />
for delivery of outcomes to its membership, the<br />
Government and the community as a whole.<br />
AMPC has focussed on strengthening its<br />
partnerships with collaborating organisations<br />
and ensuring alignment of research activities<br />
and direction, as well as focussing on enhanced<br />
reporting and evaluation to demonstrate delivery of<br />
project outcomes to the industry.<br />
4<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
Industry Funded Projects and Plant Initiated<br />
Projects (PIPs) are a key element of the AMPC<br />
strategic priority with the number of PIPs<br />
increasing in uptake this year. One priority<br />
for AMPC has been and continues to be the<br />
improvement of communications to its members<br />
and levy payers on the results of industry funded<br />
research and development projects.<br />
AUS-MEAT Limited jointly funded by AMPC and<br />
MLA continues to work on behalf of the Industry<br />
establishing and maintaining National Industry<br />
Standards. AUS-MEAT’s commercial services<br />
operate on a fully cost recovery basis lessening the<br />
financial burden for Industry financial support.<br />
As Chairman, my vision for AMPC is that it remains<br />
a significant contributor to a sustainable red meat<br />
processing industry which continues to meet<br />
consumer and community expectations. With<br />
the continued strong support of the Board and<br />
Management I know that the AMPC will take the<br />
steps to continue the valuable interaction, advice<br />
and direction from our Members, Stakeholders,<br />
Industry Peak Council and the <strong>Australian</strong><br />
Government.<br />
The continued nurturing of these important<br />
partnerships are fundamental to AMPC’s<br />
ability to deliver solid outcomes by the effective<br />
identification of priorities, objectives and activities<br />
for the processing industry and by aligning<br />
AMPCs aspirations with the Commonwealth RD&E<br />
priorities.<br />
AMPC remains strong financially and confident<br />
to engage the future challenges. AMPC is now<br />
operating to enhance its strategic investment<br />
across the portfolio, underpinned by rigorous<br />
consultation with members, the Commonwealth<br />
Government and other key stakeholders.<br />
I wish to thank the Directors on the AMPC Board<br />
for their significant contribution to the Company<br />
and its activities. In particular, the support<br />
provided by Stephen Kelly, Deputy Chairman and<br />
Peter Noble, Chairman of the Audit and Risk<br />
Committee, is greatly appreciated. I would also<br />
like to thank the CEO and staff for their input<br />
to Company activities and last but not least I<br />
acknowledge the Board’s appreciation of member<br />
support throughout the year.<br />
Gary Hardwick, Chairman<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 5
Chief Executive Officer’s REPORT<br />
It is recognised that Australia is the world’s<br />
largest exporter of red meat, sending product to<br />
more than 100 countries world-wide. Australia’s<br />
‘clean green’ image and reputation for safe, high<br />
quality red meat underpins this global success.<br />
At the same time, meat processors face a period<br />
of unprecedented change. The growing world<br />
population and the strong demand for food<br />
provides enormous opportunities, as does the new<br />
technology becoming available to the sector.<br />
Further, increasing challenges include changing<br />
customer expectations, global economic instability,<br />
climate change and carbon policies, drought and<br />
labour shortages.<br />
These issues will place pressure on the ability of<br />
the meat processing industry to remain productive<br />
and competitive in the world market. RD&E has<br />
a large and vital role to play in helping meet<br />
these challenges facing our industry, improve<br />
productivity, maintain market access and secure<br />
Australia’s reputation in the global market place.<br />
Upon joining AMPC in November 2010, these<br />
and other challenges facing the sector were<br />
at the forefront of my mind. This led me to<br />
consider the need for refreshing RD&E priorities<br />
and determining a revised approach towards<br />
investment.<br />
Specifically, my focus this year was directed to the<br />
following areas:<br />
Enhancing the process to capture the needs,<br />
issues, challenges and priorities of members and<br />
stakeholders to form innovative and scientific<br />
projects and programs<br />
New and emerging drivers, policies, market<br />
pressures and technologies that require<br />
underpinning by RD&E investment result in the<br />
need for continual review and evaluation of short<br />
term activities. It was clear to AMPC that its RD&E<br />
priorities needed to better account for the changing<br />
customer, community and public expectations<br />
in order to maintain the strong position of the<br />
<strong>Australian</strong> red meat processing industry.<br />
To this end, we set about analysing investments,<br />
gathering member priorities and the priorities<br />
of key stakeholders in science, technical and<br />
Government roles. This information enabled<br />
AMPC to revise its investments – a process that it<br />
intends to continue into <strong>2011</strong>-2012 towards better<br />
addressing industry needs. This year’s Annual<br />
Operating Plan <strong>2011</strong>-2012 demonstrates a change<br />
in the structure of AMPCs portfolio and reflects<br />
an enhanced process to engage with stakeholders<br />
from both industry and Government.<br />
Firming up existing collaborations with<br />
key partners, including the Commonwealth<br />
Government, <strong>Meat</strong> and Livestock Australia (MLA),<br />
the <strong>Australian</strong> <strong>Meat</strong> Industry Council (AMIC) and<br />
the National <strong>Meat</strong> Industry Training and Advisory<br />
Council (MINTRAC)<br />
AMPC has been working closely with MLA to ensure<br />
alignment in joint programs and other related<br />
activities such as reporting and evaluation. This<br />
includes shared communication and reporting,<br />
and a series of joint strategic planning events as<br />
well as a shared approach in relation to project<br />
development with members and RD&E providers.<br />
AMPC has sought to enhance consultation with<br />
AMIC to ensure that priorities and issues identified<br />
as needing RD&E can be effectively considered<br />
through AMPC’s RD&E investment framework.<br />
Specific examples include new arrangements<br />
for joint consultation on issues such as climate<br />
change, livestock management, traceability,<br />
biosecurity standards and market access.<br />
AMPC and MINTRAC have together commenced<br />
joint planning towards more collaborative delivery<br />
of extension, education and training to industry.<br />
With all three organisations above, effort has<br />
been directed to co-badging, joint presentations,<br />
reporting and clear demonstration of effective use<br />
of resources on behalf of the meat processing<br />
industry. This is a clear example of the opportunity<br />
for collaboration between Rural Research and<br />
Development <strong>Corporation</strong>s (RDCs) and industry<br />
bodies to ensure reduced administrative burdens<br />
and better delivery to levy payers.<br />
In addition to the above, there have been several<br />
process changes. The National RD&E Framework<br />
has influenced AMPC to provide greater<br />
consideration of collaboration and co-investment,<br />
6<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
therefore activities for 2010-<strong>2011</strong> also include<br />
projects that involve investment with other livestock<br />
industry sectors, other RDCs and collaborations<br />
with other RD&E provider and CRC’s investor<br />
organisations.<br />
Establishing a member engagement strategy that<br />
included regular reporting of RD&E and Marketing<br />
outcomes, enhanced communication mediums<br />
and forums, brand development, scientific<br />
presentations and a focus on extension and<br />
education<br />
A collaborative approach to strategic planning<br />
was also needed to allow our industry to<br />
achieve competitive, sustainable operation in<br />
tomorrow’s trading environment. AMPC depends<br />
on the expertise and experience of its advisory<br />
committees to develop relevant RD&E plans,<br />
provide advice on research and development<br />
investment, assist with the selection of priority<br />
R&D projects and evaluate performance of R&D to<br />
ensure close alignment of committee operations<br />
with AMPC’s objectives. We anticipate that<br />
enhanced engagement with these committees<br />
towards joint planning to underpin AMPC direction<br />
will be a key focus into <strong>2011</strong>-2012.<br />
Accordingly, AMPC has been discussing with the<br />
membership a revised consultation arrangement<br />
that includes the development of short, medium<br />
and long term strategies, regular working group<br />
consultations, nation-wide priority development and<br />
enhanced reporting of RD&E outputs to industry.<br />
Further, a new industry engagement strategy to<br />
engage a wider array of stakeholders, including<br />
members as well as those from science, policy,<br />
other primary industries and RD&E providers, has<br />
been established. This has been supported by the<br />
development of regular RD&E Case study material<br />
for members and a series of informative workshops<br />
and tutorials on RD&E outcomes against each<br />
portfolio area. These developments will continue<br />
into <strong>2011</strong>-2012.<br />
Reviewing the investments to date and<br />
establishing a more balanced RD&E and<br />
Marketing portfolio that better reflects member,<br />
Government and community priorities.<br />
Analysing our previous investments, including the<br />
Plant Initiated Program, and providing feedback<br />
to members was a key priority this year and<br />
will continue into <strong>2011</strong>-2012. There has been<br />
considerable effort directed to the transparent<br />
reporting of RD&E outputs within this year’s<br />
Annual Report. The revision of AMPC’s Strategic<br />
Plan during <strong>2011</strong> is expected to result in further<br />
changes to AMPC’s program structure and portfolio<br />
balance and consequently, the Annual Operating<br />
Plans for 2012 and 2013. This year’s Annual<br />
Operating Plan more clearly communicate AMPC’s<br />
programs and activities and their alignment with<br />
red meat industry’s <strong>Meat</strong> Industry Strategic Plan<br />
(MISP) 2010-2015, and the Federal Government’s<br />
National and Rural R&D priorities.<br />
A clear business strategy and communication<br />
messages that describe our function and how we<br />
collaborate with other organisations to deliver<br />
RD&E outcomes.<br />
Focus has remained on continual business<br />
improvement and refining internal policies<br />
for better delivery of RD&E going forward.<br />
Considerable effort is being directed to<br />
strengthening internal and external governance<br />
arrangements and controls, refining policies<br />
around projects and programs, and developing a<br />
clear investment framework and process. I take the<br />
opportunity to thank our partners, the <strong>Australian</strong><br />
<strong>Meat</strong> Industry Council, <strong>Meat</strong> and Livestock<br />
Australia and MINTRAC for their support and input<br />
to this process.<br />
Extension activities will be a key focus for AMPC<br />
in <strong>2011</strong>-2012, given the need to appropriately<br />
underpin the principles of the National RD&E<br />
Framework and improve communication with<br />
members, increase transparency and ensure that<br />
RD&E outcomes are effectively understood and<br />
adopted in industry.<br />
I hope you enjoy reading this report and its<br />
summaries of AMPC activities and outcomes this<br />
year. I look forward to working with the AMPC<br />
Board, AMPC members, <strong>Meat</strong> and Livestock<br />
Australia, the <strong>Australian</strong> <strong>Meat</strong> Industry Council, the<br />
Government and other key stakeholders towards<br />
continual improvement in AMPC’s delivery in RD&E<br />
and Marketing for the meat processing industry.<br />
I look forward to the <strong>2011</strong>-2012 year as the<br />
opportunity to consolidate many of these activities<br />
and have highlighted some of the priority areas for<br />
next year, both in terms of RD&E outcomes and<br />
business strategy in sections of this Report.<br />
I take the opportunity to thank industry members<br />
for their inputs and support for the above activities<br />
during the year.<br />
Michelle Edge, Chief Executive Officer<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 7
proGRAM manager’s report<br />
Much of my focus during the last year has been<br />
on supporting the Board and CEO in re-focusing<br />
AMPC’s consultation, strategy development,<br />
monitoring, reporting and evaluation processes to<br />
ensure that they meet the company’s obligations<br />
to stakeholders and account for and reflect agreed<br />
industry priorities.<br />
Specifically AMPC has strengthened the way by<br />
which we attract and review RD&E project proposals<br />
through the implementation of a two step project<br />
submission process. This change has opened up<br />
the opportunity for an increased number of R&D<br />
providers to submit a larger number of project ideas<br />
across a broader range of topics by introducing an<br />
initial Preliminary Research Proposal (PRP) step.<br />
The PRP allows R&D providers to more simply<br />
introduce concepts for industry consideration, with<br />
industry then selecting the best of these for the next<br />
phase of the process which is to call for much more<br />
detailed Full Research Proposals (FRP).<br />
AMPC has also directly engaged industry in a<br />
process of refining project applications under<br />
consideration through the establishment of specific<br />
working groups tasked with working with AMPC<br />
and R&D providers to ensure that final project<br />
methodologies supported are well considered<br />
and properly informed by industry knowledge and<br />
expectations for each project.<br />
To ensure that funded projects once underway<br />
continue to meet industry requirements and deliver<br />
agreed outputs against well-defined milestones<br />
AMPC has initiated much closer and more detailed<br />
monitoring, evaluation and reporting back to<br />
industry throughout the life of each project.<br />
I particularly thank AMPC members for their<br />
support in developing and implementing these<br />
important refinements and am pleased to say that<br />
through their hard work AMPC has been able to<br />
demonstrate considerable value add and improved<br />
rigor to these processes and that as an industry we<br />
are increasingly better placed to make informed and<br />
balanced assessments of the value propositions<br />
represented by competing investing priorities and to<br />
deliver the benefits derived back to industry.<br />
John McGuren,<br />
Program Manager<br />
8 <strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
MEMBER SERVICES & COMMUNICATION MANAGER’S report<br />
This year, together with the CEO, I have been<br />
working to establish a clear communication<br />
strategy and within this activity, focus on branding,<br />
communication mediums for members, promotion,<br />
reporting and enhanced information channels to<br />
communicate RD&E outcomes to stakeholders.<br />
We undertook a rebranding of all its<br />
communication documents. AMPC, MLA and<br />
MINTRAC worked together to produce new<br />
promotional material that demonstrated our close<br />
collaboration, including new shared conference<br />
banners and industry and stakeholder information<br />
materials.<br />
We have committed to a new communications<br />
strategy to enhance delivery and interaction with<br />
members and key stakeholders and this included<br />
the development of RD&E Case Study Circulars,<br />
which summarise the outcomes from specific R&D<br />
projects, including PIPs and academic reports.<br />
We have revised the process by which we engage<br />
with members to determine their RD&E priorities<br />
and needs, such that AMPC can support industry<br />
more closely in developing project concepts and<br />
delivering projects of benefit. A survey of members<br />
assisted us to identify the key issues and priorities.<br />
The surveys and circulars will continue during<br />
<strong>2011</strong>-12 to enhance commitment to industry.<br />
During the period 2010-11 three successful<br />
Industry Conferences were held. The “Building<br />
a safer workplace together” OH&S Conference<br />
in October 2010 had 91 participants attending<br />
including 40+ processing members. The iMACA<br />
(International <strong>Meat</strong> Automation Conference) in<br />
February <strong>2011</strong>, had 112 participants and the<br />
AMPC RD&E conference, “Advancing the Future for<br />
<strong>Meat</strong> Processing through engineering, research,<br />
efficiency and sustainability” in June, had 138<br />
participants, including 44 member participants<br />
attending the conference. Research providers,<br />
University, Government organisations were<br />
represented also.<br />
Irene Parker, Member Services and<br />
Communications Manager<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 9
ABOUT AMPC<br />
THE ROLE AND FUNCTION OF AMPC<br />
<strong>Australian</strong> agriculture is innovative and<br />
consistently out-performs most other sectors<br />
of the <strong>Australian</strong> economy in total factor<br />
productivity growth, with domestic rural R&D a<br />
major driver of this performance.<br />
The AMPC is the Rural Research and<br />
Development <strong>Corporation</strong> for the red meat<br />
processor industry. AMPC partners with<br />
another Rural Research and Development<br />
<strong>Corporation</strong>, <strong>Meat</strong> and Livestock Australia, to<br />
jointly invest under an agreed Memorandum<br />
of Understanding for whole of supply chain<br />
Marketing and R&D activities within the red<br />
meat industry.<br />
AMPC receives slaughter levies of<br />
approximately $16m annually and invests<br />
in Research, Development, Marketing and<br />
Extension activities, as part of a co-investment<br />
model, with MLA and Government to address<br />
priorities identified in consultation with our levy<br />
payers and other key stakeholders.<br />
This Annual Report to stakeholders focuses on<br />
AMPC’s activities and outcomes for the 2010-<br />
11 financial year, aligned with our strategic<br />
imperatives and structured according to our<br />
strategic and Annual Operating Plans. Our<br />
Annual Operating Plan outlines all AMPC’s<br />
strategic imperatives, strategies to achieve<br />
them, planned activities for the year and key<br />
performance indicators. AMPC acknowledges<br />
the matching funds provided by the <strong>Australian</strong><br />
Government to support the research and<br />
development detailed in this report.<br />
Our priority planning process involves<br />
consultation with industry levy payers,<br />
Government and other research, technical,<br />
industry, supply chain and community<br />
organisations.<br />
There are 3 programs in which AMPC invests to<br />
deliver RD&E and Marketing outcomes to the<br />
meat processing industry:<br />
• The Joint program is a marketing and R&D<br />
program directed at supply chain, market<br />
access and designed to develop and market<br />
red meat products in international and<br />
domestic markets. The Joint program is the<br />
primary program for delivering outcomes<br />
under the red meat industry Memorandum<br />
of Understanding (described below in detail)<br />
that is facilitated by <strong>Meat</strong> and Livestock<br />
Australia.<br />
• The Core R&D program is the main R&D<br />
program in the meat processing industry.<br />
This program addresses issues facing<br />
the entire red meat industry such as<br />
climate change research, environment,<br />
sustainability, technology and innovation,<br />
livestock management and capability.<br />
The Core R&D program is also directed<br />
to address industry-related issues that<br />
impact Government and the community to<br />
maximise public good outcomes.<br />
• The Plant Initiated Project (PIP) program<br />
is designed to enhance uptake of R&D at<br />
the individual meat processing plant level,<br />
allowing companies to adopt and implement<br />
specific innovations on site and to measure<br />
their effectiveness.<br />
Our expenditure against these programs is<br />
detailed in our Annual Reports and Annual<br />
Operating Plans which, in accordance with the<br />
Statutory Funding Agreement, are lodged with<br />
the Commonwealth Government.<br />
10<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
OBJECTIVES<br />
The objectives for which the Company was<br />
established are:<br />
• To promote, protect and further the interests of<br />
the Company and its Members;<br />
• To act as an Industry Services Body as declared<br />
by the Minister for Primary Industries by<br />
providing services, procuring and providing<br />
leadership relating to R&D and Marketing in<br />
the meat processing industry for the benefit of<br />
its Members, other meat processors and the<br />
community in general;<br />
• To enter into a Deed of Agreement with the<br />
Commonwealth of Australia relating to the<br />
payment to and application of funds by the<br />
Company;<br />
• To enter into contracts with, employ and engage<br />
individuals, organisations, companies, bodies or<br />
entities to manage, R&D and Marketing projects<br />
and/or other projects on behalf of the Members<br />
and in the interests of and for the benefit of<br />
meat processors and/or the meat processing<br />
industry;<br />
• To perform such acts and do any other<br />
thing deemed necessary or desirable for the<br />
preservation, protection and promotion of the<br />
rights and interests of the Members as meat<br />
processors.<br />
To achieve these objectives, AMPC consults with<br />
its Members, the Commonwealth Government and<br />
industry stakeholders and develops, implements<br />
and maintains a Strategic Plan. AMPC regularly<br />
reviews its Strategic Plan in accordance with the<br />
requirements set out in the Statutory Funding<br />
Agreement with the Commonwealth Government.<br />
THE MEMORANDUM OF UNDERSTANDING<br />
The Company became a party to the Red <strong>Meat</strong><br />
Memorandum of Understanding (MOU) on 27 April<br />
1998 and to subsequent revisions to the original<br />
document. The MOU links the Company with MLA<br />
and LiveCorp together with the Commonwealth of<br />
Australia, Peak Industry Councils and the Red <strong>Meat</strong><br />
Advisory Council (RMAC).<br />
The roles and responsibilities of the Company<br />
under the MOU are to provide management,<br />
funding and administrative arrangements for<br />
red meat processing industry activities to be<br />
undertaken by or through MLA including ‘Joint<br />
Functions’, ‘Core Functions’ and any unforeseen<br />
event which has significant impact upon the<br />
industry. Additionally, AMPC consults with the<br />
AMIC to undertake activities and provide services<br />
on behalf of the processing sector of the industry<br />
and develop jointly with MLA and/or AMIC goals for<br />
achieving the vision and strategic imperatives for<br />
the industry sector it represents.<br />
AMPC ensures its activities are consistent with the<br />
MISP and pursues the achievement of industry<br />
goals identified in the MISP in a manner consistent<br />
with policies and strategic imperatives developed<br />
pursuant to the MOU.<br />
PRINCIPAL ACTIVITIES<br />
AMPC’s principal activities are to maximise the<br />
efficiency, viability and sustainability of the red<br />
meat processing industry by supporting the<br />
development of sound, scientific solutionsthat will:<br />
• Improve the long term efficiency and<br />
competitiveness of the industry;<br />
• Promote <strong>Australian</strong> meat in the domestic<br />
and international marketplace enhance the<br />
sustainability of the industry;<br />
• Assist to protect, secure and maintain market<br />
access;<br />
• Enhance capability and<br />
• Enhance the overall productivity and<br />
performance of the meat processing sector.<br />
AMPC engages in extensive consultation with<br />
internal and external key stakeholders to develop<br />
an understanding of the challenges, drivers and<br />
opportunities in the meat processing environment<br />
that affect companies, the broader industry and<br />
the community. This consultation enables AMPC to<br />
establish its strategic imperatives and priorities by<br />
which to direct R&D and Marketing investment.<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 11
AMPC invests in projects in a wide range of<br />
areas, including meat science, automation and<br />
technology, environment and sustainability, animal<br />
health, welfare and biosecurity, traceability and<br />
market access.<br />
AMPC PARTNERING WITH GOVERNMENT<br />
The National and Rural Research Priorities of the<br />
<strong>Australian</strong> Government provide an over-arching<br />
framework for public investment in rural research<br />
and development. AMPC’s Annual Operational Plan<br />
2009–10 was closely aligned with these priorities.<br />
AMPC addresses the Government’s priorities in the<br />
following manner:<br />
• By aligning the current and previous corporate<br />
plans with the Government’s priorities, which<br />
are incorporated into their strategies. This<br />
includes the establishment of specific programs<br />
to address particular priorities. The current<br />
AMPC Strategic Plan specifies strategies that<br />
will contribute to these priorities;<br />
• By ensuring that the RD&E plans for individual<br />
programs address the Government’s priorities<br />
by regularly advising AMPC’s providers and<br />
researchers of the Government’s priorities;<br />
• By ensuring that AMPC’s annual reports<br />
and annual operational plans have sections<br />
reporting on the outcomes from AMPC<br />
investments that contribute to the priorities.<br />
The diagram in the next section shows how AMPC<br />
addresses these priorities through its programs<br />
and associated activities that are relevant to our<br />
role as an industry service body.<br />
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<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
AMPC RD&E AND MARKETING PROGRAMS<br />
The partnership of Industry, Government and private<br />
sector investment into Research, Development and<br />
Extension and Marketing programs in the meat<br />
processing industry during 2010 – <strong>2011</strong> has made an<br />
important contribution to the industry and the broader<br />
<strong>Australian</strong> community.<br />
The delivery of these programs are closely aligned to<br />
agreed Industry and Government strategic priorities.<br />
The AMPC’s programs are focussed on increasing<br />
industry productivity and net value through sound,<br />
scientific solutions. The main objective is that<br />
processing businesses and their supply chains<br />
continue to be innovative, productive, efficient and<br />
adaptive.<br />
Within this context, AMPC invests against the Strategic<br />
Outcomes and key focus areas, overleaf:<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 13
AMPC RD&E & marketing program map<br />
Strategic Objectives<br />
Proportion of<br />
investment (%)<br />
Section 1<br />
Increasing<br />
productivity and<br />
net value<br />
23%<br />
Section 2<br />
Market access is<br />
maintained and<br />
enhanced<br />
15%<br />
Section 3<br />
Product integrity<br />
and quality are<br />
demonstrated to<br />
consumers and<br />
markets<br />
23%<br />
Key Focus Areas<br />
Developing new<br />
technologies, systems<br />
and processes to<br />
improve industry<br />
productivity and<br />
efficiency.<br />
Maximising options<br />
for processors in<br />
domestic and export<br />
markets.<br />
Demonstrating<br />
product integrity,<br />
safety and quality.<br />
New and innovative<br />
product development.<br />
Enhancing business<br />
innovation,<br />
productivity and<br />
adaptation.<br />
Research Areas and Activities<br />
• New technologies<br />
• Automation<br />
• Robotics<br />
• Manual assist devices<br />
• New systems and<br />
processes for meat<br />
production<br />
• OH&S improvements<br />
• Product and objective<br />
carcass measurement<br />
• Sensing and scanning<br />
technologies<br />
• Tools for enhancing<br />
efficiency<br />
• Value adding to<br />
products<br />
• Co-product and<br />
commercial ingredient<br />
development<br />
• Bioactives<br />
(development)<br />
• Evaluation and cost<br />
benefit analysis<br />
• Adoption<br />
• Commercialisation<br />
• Analysing market<br />
conditions<br />
• Supporting market<br />
networks and<br />
negotiations<br />
• Monitoring and<br />
responding to trade<br />
developments<br />
• Managing and<br />
meeting customer<br />
and importing country<br />
requirements<br />
• Coalition building in<br />
key markets<br />
• Research on technical<br />
barriers to trade<br />
• Standards<br />
development and<br />
implementation<br />
• Developing and<br />
implementing quality<br />
assurance standards<br />
and requirements<br />
• Investigating food<br />
safety issues and<br />
developing research<br />
solutions<br />
• Maintaining product<br />
integrity and safety<br />
• Developing and<br />
implementing<br />
traceability systems<br />
• Promoting product<br />
integrity<br />
• Implementing food<br />
safety surveillance<br />
systems and national<br />
benchmarks<br />
• Investigating<br />
microbiological<br />
impacts and process<br />
control<br />
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<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
Section 4<br />
Driving demand<br />
Section 5<br />
Sustainable and<br />
responsible<br />
processing practices<br />
that meet community<br />
expectations<br />
Section 6<br />
Industry and<br />
stakeholders are<br />
engaged and<br />
capable<br />
Section 7<br />
Continual<br />
improvement<br />
14%<br />
12%<br />
7%<br />
6%<br />
Promoting and<br />
enhancing the eating<br />
quality and nutritional<br />
attributes of red<br />
meat.<br />
Growing demand for<br />
red meat products<br />
in the <strong>Australian</strong><br />
community.<br />
Sustaining the natural<br />
resource base and<br />
managing climate<br />
change impacts.<br />
Promoting industry<br />
value through<br />
improvement in<br />
livestock management<br />
and supply chain<br />
practices.<br />
Developing industry<br />
capability.<br />
Education and<br />
extension.<br />
Industry and<br />
stakeholders are<br />
engaged and capable.<br />
Engaging<br />
stakeholders.<br />
Improving<br />
organisational<br />
efficiency and<br />
delivery.<br />
Delivering business<br />
objectives.<br />
• Developing eating<br />
quality interventions<br />
• Developing<br />
technologies to<br />
optimise eating<br />
quality<br />
• Promoting red meat’s<br />
role in a balanced diet<br />
• Establishing<br />
consistent dietary<br />
recommendations<br />
• Marketing lamb and<br />
beef<br />
• Developing campaigns<br />
to promote red meat<br />
to the community<br />
• Research to establish<br />
evidence based<br />
nutrition standards<br />
• Increasing knowledge<br />
in relation to health,<br />
nutrition and well<br />
being<br />
• Promoting health<br />
benefits of red meat<br />
to the community<br />
• New technologies<br />
to improve waste<br />
management<br />
• Research to address<br />
climate change<br />
• Improving industry<br />
knowledge / capability<br />
for sustainable<br />
processing practice<br />
• Improving resource use<br />
efficiency<br />
• Informing and engaging<br />
industry stakeholders<br />
• Monitoring and<br />
managing community<br />
attitudes<br />
• Improving animal<br />
health, welfare and<br />
livestock management<br />
• Implementing enhanced<br />
biosecurity practices<br />
• National benchmarking<br />
for environment and<br />
livestock management<br />
• Enhancing industry<br />
capability through<br />
up-skilling, training<br />
and professional<br />
development<br />
programs<br />
• Enhancing and<br />
sustaining research<br />
capability through<br />
undergraduate<br />
and post-graduate<br />
programs<br />
• Engaging industry<br />
through education and<br />
extension initiatives<br />
• Implementing practice<br />
change<br />
• Supporting young<br />
professionals and<br />
early career skill<br />
development through<br />
leadership and<br />
innovation programs<br />
• Enhancing<br />
collaborations with<br />
other RDCs and<br />
primary industry<br />
bodies<br />
• Creating awareness<br />
of AMPC RD&E and<br />
Marketing outcomes<br />
• Enhancing<br />
collaboration with red<br />
meat partners and<br />
Government<br />
• Proactively engaging<br />
stakeholders<br />
• Improving<br />
organisational<br />
efficiency<br />
• Risk management<br />
• Strategic planning<br />
• Consultation to<br />
underpin strategy<br />
development and<br />
RD&E priorities<br />
• Compliance activities<br />
• Investment framework<br />
• Reporting<br />
• Evaluation<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 15
“Developing new technologies,<br />
products and systems”<br />
16<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
REPORT TO STAKEHOLDERS<br />
Section 1: INCREASING PRODUCTIVITY & NET VALUE<br />
Productivity growth and the ability to respond to<br />
changing economic conditions are essential to<br />
maintaining industry competitiveness. Research<br />
and development, coupled with processor<br />
innovation are recognised across industry as<br />
necessary to underpin productivity gains and<br />
product development. In particular, developing and<br />
implementing appropriate technology solutions is<br />
critical to improving a processor’s bottom line and<br />
ensuring the sustainability of the industry.<br />
New technologies such as automation offer<br />
significant opportunities to solve these problems<br />
and improve productivity, yield and profitability, as<br />
well as minimise risks to occupational health and<br />
safety (OH&S) performance and reduce the current<br />
challenge of attracting people with new skills<br />
into the industry. Automation can also increase<br />
yield through greater accuracy and reliability and<br />
improve hygiene and food safety by less manual<br />
product handling and cross contamination between<br />
carcases.<br />
In working to address this program area, AMPC<br />
invests currently within three key focus areas:<br />
• Developing new technologies, systems and<br />
processes that improve industry productivity<br />
and processing efficiency;<br />
• New and innovative products;<br />
• Enhancing business innovation, productivity and<br />
adaptation.<br />
Additionally, AMPC focusses on technologies that<br />
improve manufacturing efficiency and/or worker<br />
operational health and safety and in supporting<br />
members to identify and develop plant initiated<br />
projects to ensure that outcomes from R&D<br />
are adopted and implemented in processing<br />
businesses.<br />
AMPC, in collaboration with MLA, will work<br />
towards setting a new 5 year strategy around<br />
technology development, that is underpinned<br />
by joint consultation of members and RD&E<br />
and technology providers. The Strategy will be<br />
underpinned by relevant reviews of international<br />
technologies, evaluation of the barriers to<br />
development and uptake of technology in industry<br />
and cost benefit of preferred industry options.<br />
AMPC will continue to examine opportunities for<br />
new and innovative products and will consider<br />
options for enhancing business innovation and<br />
adaptation over the next 2-3 years, taking account<br />
of the learnings in the last decade. There will be<br />
a major focus on investment towards evaluating<br />
the outcomes of technologies that have been<br />
developed and/or are now commercially ready.<br />
KEY FOCUS AREA:<br />
DEVELOPING NEW TECHNOLOGIES,<br />
SYSTEMS AND PROCESSES THAT<br />
IMPROVE INDUSTRY PRODUCTIVITY AND<br />
PROCESSING EFFICIENCY<br />
BLADESTOP TM TECHNICAL REVIEW<br />
Industry reports show that bandsaws within the<br />
<strong>Australian</strong> red meat industry cause significant<br />
OH&S injuries each year. Up to now, there has been<br />
no solution to prevent amputations on bandsaws<br />
within the meat processing sector. BladeStop is a<br />
technology that can be built into new bandsaws to<br />
reduce the risk of injury.<br />
Bladestop provides a brake mechanism on<br />
bandsaws that stops the blade if it comes in<br />
contact with the operator’s hand. This significantly<br />
reduces the extent of injuries and limits the<br />
number of severe injuries that result in amputation.<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 17
The benefits of the device include;<br />
• Reduced down time (when an accident occurs);<br />
• Reduced sick leave and related rehabilitation<br />
costs for injured workers;<br />
• Reduced time and cost for placing a<br />
replacement worker;<br />
• Insurance savings;<br />
• Reducing the social and financial impact of<br />
serious injury or amputation for workers;<br />
• Improved safe work practices;<br />
• Improved employee relations.<br />
“A new and innovative technology<br />
development that focusses on<br />
occupational health and safety”<br />
UPDate<br />
Following the development and testing of several<br />
iterations of the technology necessary to ensure<br />
the highest levels of performance and reliability<br />
required of such a critical safety device, the<br />
Bladestop technology is now in final stages of<br />
trial. This will occur at 3 meat processing sites<br />
and will shortly become commercially available to<br />
the industry.<br />
THE ROBOTIC KIDNEY FAT REMOVAL SYSTEM<br />
This robotic system removes kidney fat at sheep<br />
meat plants. The system incorporates a robot,<br />
vacuum and nozzle system, linked to laser sensing<br />
technology. Removing the kidney fat manually is a<br />
repetitive and dirty task and has many associated<br />
OH&S risks. These include repetitive strain injury<br />
and potential for back and shoulder injuries. The<br />
potential for cross contamination from one carcass<br />
to the next is also high. The speed carcases travel<br />
on the chain requires a very competent operator to<br />
maintain concentration to ensure that the quality<br />
of the sterilisation procedures is met.<br />
“Enhancing processing efficiency, food<br />
safety and worker safety”<br />
The benefits of the Robotic Kidney Fat Removal<br />
include:<br />
• Improvements in OH&S due to elimination of<br />
operator strain, and repetitive tasking;<br />
• Consistent process with improved accuracy and<br />
repeatability;<br />
• Increase in efficiency and removal of fat;<br />
• Improved yield;<br />
• Reduced labour cost;<br />
• Improved food safety.<br />
UPDate<br />
The Kidney Fat Removal System is now<br />
commercially available.<br />
VERIFICATION AND COMMERCIAL PROVING<br />
OF SPRAY CHILLING IN AUSTRALIAN BEEF<br />
PLANTS - PHASE 2<br />
Spray chilling involves the intermittent spraying<br />
of carcases and sides with water during the early<br />
stages of refrigeration. The aim is to reduce<br />
the weight loss (shrink) of up to 1- 2% due to<br />
evaporation of moisture from the surface tissue.<br />
Beef carcases are normally chilled for 16 to<br />
20 hours prior to boning into primal cuts and<br />
trimmings which are packed for further cooling<br />
and dispatch. During this carcase chilling process,<br />
carcases can lose 1 to 2% of their hot weight which<br />
also represents a loss of revenue for the processor.<br />
Spray chilling has been widely used in the USA for<br />
many years to reduce this weight loss (or shrink)<br />
but the practice has been used little in Australia.<br />
A series of projects have now been completed<br />
investigating the use of spray chilling in <strong>Australian</strong><br />
meat processing plants for both beef and lamb.<br />
This work has successfully adapted spray chilling<br />
techniques to meet specific requirements of<br />
<strong>Australian</strong> red meat processors including the<br />
requirement to maintain eating quality and shelf<br />
life over extended periods required of <strong>Australian</strong><br />
export product.<br />
18<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
UPDate<br />
Following the success of <strong>Australian</strong> Spray chilling<br />
trials and publication of the research and<br />
development outcomes a number of <strong>Australian</strong><br />
plants are implementing this process.<br />
The following final reports on spray chilling are<br />
available:<br />
• Evaluation of spray chilling at a meat<br />
processing site;<br />
• Verification of the effect of spray chilling<br />
in preventing chiller yield loss;<br />
• Commercial proving of spray chilling in<br />
australian beef plants.<br />
SEMI-AUTOMATED BEEF SCRIBING<br />
The beef scriber is a robotic system being<br />
developed that will engage a vision system to<br />
detect the ribs of the carcase and accurately scribe<br />
it with a specifically designed saw on the end of<br />
the robot whilst incorporating a fully automatic<br />
material handling system for carcase movement,<br />
orientation and stabilisation to match processing<br />
speeds.<br />
Beef scribing has been identified as one of<br />
the most dangerous and physically difficult of<br />
all meat processing tasks. It is also where a<br />
significant amount of processing yield can be lost.<br />
Consequently, in the current manual operation, the<br />
task is undertaken by very skilled and experienced<br />
operational staff (NB. processors are reporting<br />
increasing difficulty in finding suitable staff<br />
replacements).<br />
“New trials demonstrate the application<br />
of robotics using sensing technology”<br />
The benefits of automating the beef scribing task<br />
include:<br />
• Reduced occupational health and safety risks;<br />
• Improved productivity;<br />
• Optimised yield of high value cuts;<br />
• Improved food safety due to reduced handling.<br />
UPDate<br />
The Beef Scribing system has been successfully<br />
commissioned and is capable of processing<br />
approximately 340 carcases a day. Further<br />
development is underway to provide improved<br />
vision and sensing capability to allow for full<br />
automation of this task increasing throughput for<br />
higher volume production.<br />
AUTOMATED BEEF HOCK CUTTER PROJECT<br />
The Robotic Hock Cutter is a system that uses<br />
sensing technology and a robotic arm with<br />
attached cutting tool to remove the front and/<br />
or rear hocks automatically as the beef carcase<br />
moves along the dressing chain.<br />
“Improving eating quality and<br />
addressing heat toughening”<br />
This allows substitution of human operators by<br />
an automated system doing the same beef hock<br />
cutting task. The project includes the design and<br />
manufacture of a stabilisation structure, to keep<br />
the carcase in a consistent position while it moves<br />
on the chain, allowing for correct sensing and hock<br />
cutting. The system is intended to be fast enough<br />
to allow the cut of both hocks with only one robotic<br />
arm at the maximum chain speed of up to 240<br />
head per hour.<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 19
The benefits of the Robotic Hock Cutter include:<br />
• Improved OH&S conditions for workers;<br />
• Labour savings;<br />
• Increased yield due to improved cut accuracy;<br />
• Improved food safety due to less handling.<br />
UPDate<br />
The Robotic Hock Cutter is still being<br />
trialled.<br />
ANALYSIS OF THE PRACTICES IN<br />
SLAUGHTER, CARCASE HANDLING AND<br />
BREAK UP, DE-BONING AND END OF LINE<br />
OPERATIONS<br />
This study reviewed slaughter, boning and materials<br />
handling tasks based on a typical medium volume<br />
processor in Australia considering improvements<br />
and automation opportunities.<br />
“Review and cost benefit analysis<br />
underpins R&D investments”<br />
Concept solutions using robots in a multi-tasking<br />
function have been presented. In cases where<br />
tasks may be combined and paired together (e.g.<br />
hock cutting (before and after hide pulling); belly<br />
opening and viscera separation, splitting and spinal<br />
cord removal, higher rates of return would be<br />
expected.<br />
By using robotics where pre-cutting of carcase<br />
sides can be done using vision guided systems,<br />
yield optimisation becomes practical. Separating<br />
main primal pieces whilst keeping each piece<br />
still attached to the body of the carcase reduces<br />
handling costs and facilitates a cutting room<br />
design with minimum number of cutting, trimming<br />
and boning stations. Using flow line concepts and<br />
track-able bagging provides the means for more<br />
efficient case packing and end of line operations.<br />
At the same time better yields may be expected.<br />
An assessment of returns on investments indicates<br />
that single shift operation does not meet 24 month<br />
return on investment expectations. Strategies to<br />
reduce capital cost or make better use of resource<br />
in a 2 shift operation present faster returns as<br />
would be expected.<br />
KEY FOCUS AREA:<br />
NEW AND INNOVatiVE PRODUCTS<br />
Red meat products need to be designed and<br />
tailored to meet current and emerging needs of<br />
consumers and markets, if <strong>Australian</strong> processors<br />
are to remain competitive in the domestic market<br />
and on the world scene.<br />
The key is to increase carcase values and overall<br />
profitability through developing new, value-added<br />
products for red meat and co-products. Research<br />
to develop new and innovative products ranges<br />
from investigating options for tailored ready to<br />
eat meals to high value ingredients such as those<br />
utilised by the pharmaceutical, nutraceutical and<br />
cosmetic industries.<br />
RD&E under this focus area addresses the following<br />
research directions:<br />
• Identification and evaluation of emerging trends<br />
for new products;<br />
• Development of technologies to improve<br />
the range of applications of co-products as<br />
commercial ingredients;<br />
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<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
• Development of new technologies to enable<br />
transformation and value-adding of low value<br />
cuts;<br />
• Implementation of innovative value-adding<br />
strategies.<br />
Work has been underway to develop technologies<br />
from products and bioactives to achieve an<br />
increased carcase revenue by $5/head for cattle<br />
and $1/head for sheep. A joint AMPC and MLA<br />
survey was published at the commencement<br />
of <strong>2011</strong> that identified four blood-based<br />
bioactive products with potential markets in the<br />
pharmaceutical, medical device, food and animal<br />
health industries.<br />
The compounds determined in the project– bovine<br />
serum albumin, thrombin, immunoglobulin G and<br />
haemoglobin – were identified to have the potential<br />
to add an additional revenue stream for processors.<br />
A fifth bioactive compound derived from cartilage,<br />
chondroitin sulphate, has also been identified<br />
as having commercial potential. Business cases<br />
for two of these bioactives estimate a potential<br />
contribution of between $8.20 and $9.50 per head<br />
for cattle.<br />
A key achievement under this focus area was<br />
progress against in the SmartStretch and<br />
SmartShape projects. The commercialisation of<br />
SmartShape, an advanced processing technology<br />
that provides consistent shaping and portion<br />
control of red meat, has progressed to date.<br />
At the retail level, three new products were<br />
launched with the assistance of MLA including<br />
the rump portioned rolled roast, Mexican beef<br />
fajita strips and a range of gourmet sausages<br />
produced using a novel processing technology<br />
that allows carcases to be de-boned and then<br />
instantly chilled. A business case for the thin sliced<br />
technology behind the retail ‘Sizzle Steak’ showed<br />
it contributed an additional $4.94 per head to<br />
carcase value.<br />
UPDate<br />
There have been some practical difficulties with<br />
the technology. To manage these and ensure fit<br />
with processing operations, the technology is now<br />
undergoing commercial trials and a process has<br />
been developed for the cold setting of primal cuts<br />
in a SmartShape machine to be demonstrated to<br />
processors and foodservice providers.<br />
TRIAL INSTALLATIONS FOR SHEEP AND BEEF<br />
COMPONENTS - PROJECT SMARTSTIM TM<br />
SmartStim TM is a new development in the electrical<br />
stimulation of carcases, further improving on<br />
the earlier stimulation systems installed in many<br />
processing plants. Electrical stimulation is a<br />
process of applying special electrical waveforms<br />
to carcases to minimise the toughening effect on<br />
meat during subsequent refrigeration. Stimulation<br />
has been used in a relatively uncontrolled way in<br />
Australia since the 1980’s, however, beginning in<br />
2000, Industry funded research developed more<br />
practical stimulation equipment which could be<br />
retrofitted to existing processing plants relatively<br />
easily. This new approach to stimulation made<br />
it possible to produce consistent and reliable<br />
stimulation effects (improved tenderness) across<br />
the diversified <strong>Australian</strong> meat processing<br />
environment for the first time.<br />
SmartStim TM represents the next generation in<br />
the evolution of stimulation technology. It gathers<br />
information about each individual carcase by<br />
applying a series of carefully selected electrical<br />
pulses and measuring the carcase reaction through<br />
a load cell. This predicts some key attributes (pH,<br />
ultimate pH and tenderness) and the system can<br />
use this information to give each carcase the exact<br />
dose of stimulation required.<br />
Existing equipment can be linked to SmartStim TM<br />
with the latter controlling the amount of<br />
stimulation provided by the First Generation<br />
equipment.<br />
UPDate<br />
The benefits of the SmartStim TM system include<br />
greater efficacy of stimulation treatments<br />
providing improved product consistency and<br />
better eating quality outcomes for consumers<br />
KEY FOCUS AREA:<br />
ENHANCING BUSINESS INNOVation,<br />
PRODUCTIVITY AND ADAPTATION<br />
In the past, businesses have lifted their productivity<br />
by adopting new technologies to reduce costs,<br />
introducing higher-yielding inputs, and increasing<br />
the size of their enterprises. In the future,<br />
intensifying competition for world markets and<br />
resources means that businesses will need to<br />
increase performance, adopt new technologies and<br />
be open to new practices.<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 21
This focus area includes measuring and evaluating<br />
the outcomes of research and development and<br />
conducting cost-benefit studies against both<br />
program and project outputs in collaboration<br />
with MLA. In addition this focus area addresses<br />
commercialisation, adoption, managing intellectual<br />
property and technical research to underpin<br />
policy or regulatory changes into the future,<br />
where gaps in policy require sound, scientific<br />
solutions. Specifically, this program addresses<br />
activities to increase processor awareness of<br />
commercial opportunities from recently developed<br />
R&D projects and products and working with<br />
industry to develop and deliver tools, information,<br />
implementation of best practice.<br />
UPDate<br />
At present, there are several evaluations<br />
underway. These include a) the cogeneration<br />
cost benefit analysis, b) evaluation of the solid<br />
anaerobic system c) cost benefit analysis of the<br />
commercial shoulder puller, d) evaluation of auto<br />
evisceration technologies and the brisket cutter<br />
and an overall program evaluation for technology<br />
and automation.<br />
DEVELOPMENT OF EDUCATION AND<br />
EXTENSION MODELS AND PATHWAYS TO<br />
MARKET FOR RESEARCH AND DEVELOPMENT<br />
OUTCOMES<br />
Work has commenced to establish a service<br />
agreement with MINTRAC that details and<br />
describes how extension/education projects will be<br />
developed, delivered and implemented in industry<br />
via the AMPC supported MINTRAC networks and<br />
other forums. Efforts have been directed at utilising<br />
these forums to engage with processors for<br />
purposes of providing feedback on R&D outcomes<br />
and gather data on priorities for future investment.<br />
UPDate<br />
Further work is underway to evaluate the benefits<br />
of the up-skilling and professional development<br />
programs supported by AMPC.<br />
APPLYING RESEARCH TO UNDERPIN AND<br />
ADDRESS POLICY GAPS AND REGULATORY<br />
CHANGES<br />
Other highlights include a sequence of technical<br />
projects that have been undertaken to address<br />
gaps in policy where research is required. These<br />
include analysis of regulatory burdens to enhance<br />
dialogue with Government in either developing new<br />
policies or revising existing regulations, analysis of<br />
the carbon pricing scheme.<br />
In particular, a key project in this area includes<br />
the analysis of the impacts of climate change,<br />
with specific focus on the economic modelling<br />
of cost impacts to the red meat supply chain.<br />
Agriculture is a major stakeholder in the effort to<br />
reduce emissions and will be in terms of the costs<br />
associated which the policies, due to the sensitivity<br />
of agricultural productivity and income to climate<br />
variability. The red meat industry is a highly export<br />
oriented sector — with a range of activities that<br />
are relatively emission intensive. Despite the high<br />
costs of emission measurement, reporting and<br />
verification underpinning decisions to exempt<br />
emissions associated with cropping and grazing<br />
activities from mandatory trading obligations and<br />
pricing, producers and processors in the red meat<br />
industry will not be immune from costs associated<br />
with carbon pricing.<br />
To examine differences in production practices and<br />
carbon price exposure, a set of specialised regional<br />
activities was constructed and case studies of<br />
processing facilities were also undertaken. The<br />
modelling suggests that processors and producers<br />
are likely to be constrained in their ability to pass<br />
on these cost increases, because they are largely<br />
price takers in an international market.<br />
For the processors surveyed, preliminary results<br />
indicate that carbon pricing will present a serious<br />
challenge to cost structures and future strategies.<br />
Over the next decade, these facilities face<br />
additional costs of an estimated $1 million to $3<br />
million per year as a result of the need to pay for<br />
the greenhouse gas emissions released as a result<br />
of their waste and energy use.<br />
UPDate<br />
AMPC has been working towards establishing a<br />
climate change strategy for the meat processing<br />
industry in collaboration with AMIC.<br />
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22 <strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
MEAT INDUSTRY SERVICES<br />
<strong>Meat</strong> Industry Services (MIS) is a collaborative<br />
industry initiative supported by the AMPC with<br />
matching Government contributions through MLA.<br />
MIS aims to support world-class industry work<br />
practices in Australia’s red meat industry and help<br />
the industry compete more effectively in world<br />
markets. The MIS is designed to support the red<br />
meat processing industry by:<br />
• Developing effective responses and solutions<br />
to current and emerging industry issues and<br />
problems of national importance to the meat<br />
industry;<br />
• Providing a rapid-response advisory service to<br />
industry and government organisations;<br />
• Contributing to key industry advisory<br />
committees, industry meetings and<br />
conferences;<br />
• Carrying out applied research and development<br />
projects for meat processors and other clients;<br />
• Providing access to international information on<br />
meat processing and food safety, including the<br />
extensive library resources of CSIRO Food and<br />
Nutritional Sciences;<br />
• Distributing regular meat technology updates<br />
to industry with information on the latest<br />
developments.<br />
AMPC, MLA and CSIRO work together to develop<br />
strategy for research and to deliver to industry<br />
the latest information on projects and issues or<br />
challenges requiring scientific solutions. During<br />
2010-<strong>2011</strong>, MIS produced a sequence of <strong>Meat</strong><br />
Technology Updates, focussing on very fast chilling,<br />
strategies for reducing the incidence of heat<br />
toughening in beef carcasses, the effects of heat<br />
toughening on quality of beef, and the incidence in<br />
Australia, the effect of slaughter method on animal<br />
welfare and meat quality, sources of contamination<br />
on beef carcases during dressing and covered<br />
anaerobic ponds.<br />
UPDate<br />
AMPC is working with MLA and CSIRO towards<br />
enhancing the MIS partnership and delivery. This<br />
includes identifying within our agreement,<br />
activities that will be strengthened including the<br />
joint development of R&D projects, a shared<br />
strategy and activities that will address future<br />
capability needs in research.<br />
For the final report and/or update on projects/programs contact AMPC or visit the AMPC website<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 23
“Enhancing market access<br />
opportunities”<br />
24<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
REPORT TO STAKEHOLDERS<br />
section 2: MARKET access is maintained<br />
& enhanced<br />
Ready access to a diverse range of international<br />
markets provides the foundation for continued<br />
prosperity of this key agricultural sector. In order<br />
to help shore up future profitability, the red meat<br />
industry implements a co-funded Market Access<br />
program.<br />
This program provides market access resources<br />
to the wider industry, including monitoring trade<br />
developments in overseas and domestic markets;<br />
undertaking market access research; developing<br />
industry-wide positions to support submissions to<br />
government on trade priorities; and lobbying for<br />
market access improvements.<br />
Market access issues also highlight the importance<br />
of food safety and animal health in maintaining<br />
Australia’s advantage over its competitors in key<br />
markets. Australia’s geographical position allows<br />
it significant natural protection from infectious<br />
disease, but significant resources are devoted to<br />
animal health, food safety and quality assurance<br />
both within other AMPC RD&E programs and within<br />
government.<br />
The market access program is underpinned by a<br />
strong working relationship with the peak industry<br />
policy councils and the Commonwealth Government<br />
which values the quick and responsive provision<br />
of detailed information about the industry, its<br />
practices and its priorities. The success of this<br />
program relies on a “whole of industry” effort in<br />
collaboration with Government.<br />
AMPC will work with red meat industry partners<br />
to further identify processor priorities in relation<br />
to promotion, marketing and trade within specific<br />
markets and communicate this to our partners<br />
to gain agreement and continue our collaborative<br />
approach to this jointly funded priority area.<br />
KEY FOCUS AREA:<br />
MAXIMISING OPTIONS FOR PROCESSORS<br />
IN DOMESTIC AND EXPORT MARKETS<br />
This year, AMPC has worked with its industry<br />
partner MLA through the Co-funded Market Access<br />
Program (C-Map), to ensure continued access<br />
to the world’s major markets and to position our<br />
industry favourably in new and emerging markets.<br />
<strong>Australian</strong> beef and sheepmeat exports already<br />
have a natural advantage due to their excellent<br />
food safety standards and animal health status.<br />
The Market Access program seeks to maintain this<br />
advantage wherever possible. The benefit of these<br />
efforts is observed through the range of world<br />
markets able to be accessed by <strong>Australian</strong> product<br />
and price premiums obtained in selected markets.<br />
“Ensuring and maintaining access to<br />
domestic and international markets”<br />
In regard to defending the existing and highly<br />
favourable market access conditions in overseas<br />
markets, our Market Access Program achieved the<br />
following tasks:<br />
• Import policy developments and competitor<br />
access arrangements were closely monitored<br />
and representations made on potentially<br />
adverse developments;<br />
• Import regulations and technical access issues<br />
were scrutinised in China, Malaysia, Indonesia<br />
and Vietnam, Lebanon, Syria, Iran, Kuwait,<br />
Qatar, Jordan and Egypt, Japan the USA and<br />
South Africa;<br />
• Industry worked with the <strong>Australian</strong> Government<br />
to respond to Country of Origin Labelling and<br />
Farm Bill issues in the USA; Russia’s accession<br />
to the WTO; and global Halal developments.<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong><br />
25
In preparing for further negotiations on the meat<br />
and livestock industry under the WTO’s Doha<br />
Round of talks, our group completed analyses<br />
of on trade liberalisation scenarios to ascertain<br />
the likelihood of commercial access outcomes,<br />
with the C-Map seeking to ensure our sectors’<br />
interests are reflected in any WTO agreement. Also,<br />
through this program, Government is well briefed<br />
of industry’s priorities for these negotiations. Our<br />
stakeholders can also note that:<br />
• FTA negotiations continue to be a high priority<br />
due to the expanded trade opportunities<br />
and our competitors’ efforts to also secure<br />
preferential trading regimes. The C-Map<br />
proactively pursued red meat and livestock<br />
industry interests in market access and sanitary<br />
& phytosanitary (SPS) negotiations and<br />
formulated negotiating positions on technical<br />
barriers to trade;<br />
• Industry worked closely with DFAT and DAFF<br />
to ensure government trade negotiators were<br />
aware of and incorporated industry priorities in<br />
relevant FTA negotiations: (Japan; Korea; China;<br />
Malaysia; Gulf Cooperation Council; Trans-<br />
Pacific Partnership; and Pacer Plus). Expediting<br />
the Australia–Korea FTA negotiations was<br />
particularly critical as the US and EU already<br />
secured preferential access arrangements in<br />
this market;<br />
• Detailed submissions outlining industry<br />
priorities were lodged for the Indonesia-<br />
Australia Comprehensive Economic<br />
Partnership Agreement and the Australia-<br />
India Comprehensive Economic Cooperation<br />
Agreement negotiations;<br />
• In-country trade advocacy (in partnership with<br />
<strong>Australian</strong> Embassy personnel) was undertaken<br />
with government officials, key influencers,<br />
industry representatives and the media in<br />
key markets to extol the benefits of trade<br />
liberalisation;<br />
• We provided input into the Productivity<br />
Commission’s inquiry into Bilateral and<br />
Regional Trade Agreements;<br />
• Previous economic analysis of the investments<br />
made within this program suggest total net<br />
benefits of $374 million (at a discount rate of<br />
5 per cent), net benefits to the beef industry<br />
of $329 million, net benefits to the sheepmeat<br />
industry of $37 million and an overall benefit<br />
cost ratio for the program of estimated at 8.2.<br />
“Maximising trade options”<br />
Overall activities to optimise market access have<br />
been illustrated through:<br />
• Maintaining favourable access conditions and<br />
addressing potential impediments through<br />
representation on the joint industry/government<br />
Red <strong>Meat</strong> Market Access Committee;<br />
• Aiming to secure improvements in access under<br />
the protracted WTO Doha Round for sheepmeat<br />
into the EU and beef into Northern Asia;<br />
• Ensuring red meat receives Free Trade<br />
Agreement (FTA) import liberalisation in all<br />
FTAs under negotiation; and<br />
• Tackling the increasing number of technical<br />
trade barriers being imposed in a variety of<br />
overseas markets.<br />
26<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
The domestic market represents a market of<br />
around 35% of beef and over 40% of sheepmeat<br />
produced nationally, so inroads for the domestic<br />
market are important to the profitability of virtually<br />
all processors. Many AMPC members report<br />
increased interest in domestic sales as a respite<br />
from the sharp fluctuations in the exchange rate<br />
of the <strong>Australian</strong> dollar over the past 15 months.<br />
RD&E activities in the areas of meat quality, food<br />
safety, environmental responsibility and nutrition<br />
all contribute to the status of the product in the<br />
domestic market and allow the Industry to promote<br />
programs with confidence in the product being<br />
offered to consumers.<br />
UPDate<br />
AMPC will continue working with MLA to underpin<br />
trade negotiations with sound, scientific solutions<br />
and enhance our capacity to describe Australia’s<br />
practices and processes to customers and trading<br />
partners.<br />
HIGHLIGHTS: PROMOTING AUSTRALIAN<br />
BEEF IN NORTH ASIA<br />
This program was developed to maintain a<br />
dominant position for <strong>Australian</strong> beef in Japan and<br />
Korea using aggressive promotion in these markets<br />
to ensure growth in long-term demand. The<br />
discovery of BSE in Japan and threats to overall<br />
beef consumption led to the red meat industry<br />
organisations, all of whom are parties to the MOU<br />
including MLA, Cattle Council of Australia, the<br />
<strong>Australian</strong> Lot Feeders Association, the AMIC, the<br />
AMPC and exporters to work together to develop<br />
the marketing strategy to respond to Japanese<br />
consumer concerns in the key Asian markets of<br />
Japan and Korea.<br />
To ensure the the dominant market position of<br />
<strong>Australian</strong> suppliers was maintained once US<br />
product returned to Japan, an additional $13.8<br />
million was invested in the marketing budget from<br />
2005-06 to 2008-09 through the Beef Funding for<br />
The Future (BFTF) program. Marketing activities<br />
highlighted Australia’s quality assurance systems<br />
including the National Livestock Identification<br />
Scheme and Australia’s safety and traceability<br />
systems, which were promoted through a range of<br />
“Promoting <strong>Australian</strong> products in<br />
international markets”<br />
mediums including Aussie Beef Forums. There<br />
was increased focus on the mid to high end hotels<br />
and chef groups, working closely with Japanese<br />
culinary leaders to communicate the positive<br />
attributes of <strong>Australian</strong> red meat through seminars<br />
and study tours. As suppliers of US beef gradually<br />
improved their safety credibility, MLA promotions<br />
shifted gears in 2008, emphasising the nutritional<br />
benefits of Aussie Beef to appeal to growing<br />
consumer interest in health and well being.<br />
This investment helped to increase recognition of<br />
the safety and quality of <strong>Australian</strong> beef within<br />
North Asia and has assisted to maintain a majority<br />
market share for beef imported into Japan and<br />
Korea, delivering benefits conservatively valued<br />
between $815 million and $994 million. As a<br />
result, Australia’s market share in Japan and Korea<br />
has increased as a result of greater awareness<br />
of, and loyalty to, Aussie Beef/HCW brands and<br />
confidence in Australia’s meat safety credentials.<br />
An independent evaluation by the Centre for<br />
International Economics (CIE) found that<br />
aggressive promotion of <strong>Australian</strong> beef in Japan<br />
delivered benefits conservatively valued at $578<br />
million, outweighing the costs at a rate of 5.1 to<br />
1. The evaluation concluded that more than 80%<br />
of the reported program benefits from 2000-01<br />
to 2014-15 would have been realised during the<br />
period of US exclusion from the Japanese market<br />
(2004-2006). The CIE reasoned that without the<br />
ongoing program investment and concerted action<br />
by industry, <strong>Australian</strong> exports to Japan would have<br />
actually fallen as a result of the US BSE outbreak.<br />
UPDate<br />
The above evaluation will be available at<br />
www.mla.com.au in the coming months.<br />
For the final report and/or update on projects/programs contact AMPC or visit the AMPC website<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 27
“Validating product quality<br />
and delivery to customer<br />
& community expectations”<br />
28<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
REPORT TO STAKEHOLDERS<br />
section 3: PRODUCT INTEGRITY & QUALITY ARE<br />
DEMONSTRATED TO CONSUMERS & MARKETS<br />
Australia is a world leader in the supply of safe<br />
and wholesome red meat products. The meat<br />
processing industry’s ability to prove superior<br />
animal health status and food safety standards<br />
underpins our success. AMPC, in partnership with<br />
MLA, dedicates investment towards maintaining<br />
our <strong>Australian</strong> standards. AMPC will continue to<br />
support initiatives in this area to foster the wider<br />
acceptance of outcome-based regulations in<br />
import and export markets.<br />
AMPC collaborates with MLA towards the Food<br />
Safety program. By assisting the industry build<br />
its expertise in relation to red meat food safety<br />
issues, AMPC in partnership with MLA, is helping<br />
to ensure the sustainability of the industry and<br />
assist companies along the supply chain to profit<br />
from implementing new, scientifically proven<br />
technologies. As part of the program, MLA has<br />
implemented a coordinated program to:<br />
• Improve the understanding of foodborne<br />
hazards;<br />
• Evaluate and validate control procedures and<br />
safety practices;<br />
• Assist industry with adoption of new<br />
technologies and processes.<br />
One of the focus areas within the program is the<br />
development of a strong scientific foundation for<br />
the Refrigeration Index (RI), now a mandatory tool<br />
for export processors designed to measures the<br />
effectiveness of refrigeration. The RI is now an<br />
integral part of Australia’s <strong>Meat</strong> Export regulations<br />
and indeed underpins the risk-based regulations<br />
acceptable to our trading partners.<br />
Another key focus area in the program is the<br />
investment towards predictive microbiology which<br />
provides scientific information for assessing<br />
pathogen growth at each point in the processing<br />
chain.<br />
An independent review by CIE revealed that a $3.8<br />
million investment in predictive microbiology by<br />
red meat industry RDCs (AMPC and MLA), together<br />
with Government, over 30 years, should return a net<br />
industry benefit of $44 million. The industry benefitcost<br />
ratio from predictive microbiology is 11:1.<br />
“Providing assurance to customers and<br />
the community”<br />
The objective of the Food Safety Program is to<br />
develop programs in industry and facilitate their<br />
adoption. These programs have an emphasis on<br />
foodborne pathogens, but also deal with hygiene<br />
and quality.<br />
AMPC will continue to work with industry to identify<br />
opportunities to underpin food safety procedures<br />
with sound science and to ensure that the systems<br />
that are in place to maintain meat product integrity<br />
are effective and communicated to customers and<br />
trading partners.<br />
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REPORT TO STAKEHOLDERS<br />
section 4: driving demand<br />
The food market is an extremely competitive<br />
environment. There is now a greater demand<br />
for convenience and lifestyle solutions and the<br />
preparation of cuts for a wider range of meal<br />
solutions. There is also strong segmentation in<br />
retail market between premium, mid-range and<br />
commodity products from retail and specialist<br />
butchers. The plethora of outlets and enticements<br />
mean that industry must ensure a coordinated and<br />
strategic approach to enhancing demand for meat<br />
products.<br />
A high level of consumer confidence in product<br />
performance is necessary for food-industry<br />
category success. In terms of research,<br />
development and marketing, the aim is to continue<br />
the development, delivery and reinforcement of key<br />
messages that encourage consumer and end user<br />
support for beef, lamb and goat products.<br />
AMPC supports the research and promotion work<br />
by its industry partner MLA into consumers’<br />
buying, diet and cooking habits. At industry level,<br />
we have continued to fund important research into<br />
the accurate measurement of beef quality and<br />
concomitant eating quality.<br />
At consumer level, we have funded specialised<br />
studies about children’s meat consumption<br />
patterns and households’ meal repertoires in order<br />
to keep abreast of changes in consumer behaviour<br />
and to decide how we can best enhance red meat’s<br />
appeal as a meal solution.<br />
Because red meat competes with lower-priced<br />
poultry and pork products, AMPC is committed to<br />
the argument that red meat needs to capitalise on<br />
its image as a tasty, versatile and highly nutritious<br />
protein. Our ongoing strategy is to re-enforce the<br />
key messages that encourage consumer and end<br />
user purchases of beef, lamb and goat products.<br />
Within this context, AMPC is investing in the<br />
following key focus areas to ensure a coordinated<br />
and strategic approach to enhancing demand for<br />
meat products.<br />
AMPC will work with industry partners to ensure<br />
that priority is placed on demonstrating to<br />
customers and consumers that they can have<br />
confidence in red meat and meat products, as well<br />
as new and innovative strategies to promote red<br />
meat to both domestic and international markets.<br />
KEY FOCUS AREAS:<br />
PROMOTing AND ENHANCING THE EATING<br />
QualitY AND NUTRITIONAL ATTRIBUTES<br />
OF RED MEAT AND GROWING DEMAND FOR<br />
RED MEAT PRODUCTS IN THE AUSTRALIAN<br />
COMMUNITY<br />
In this focus area, AMPC has worked with partner<br />
organisations to build consumer recognition about<br />
the health, nutritional and functional benefits of<br />
red meat. Targeted activities included consumer<br />
engagement and the development of key messages<br />
about taste, enjoyment, health, popularity,<br />
convenience and value for money.<br />
Key achievements included the new ‘Nothing beats<br />
Beef’ marketing campaign reaching 14.6 million<br />
<strong>Australian</strong>s and contributed to increased demand<br />
during the campaign period. Additionally, the<br />
‘Red <strong>Meat</strong> Amazing Food’ promotional campaign<br />
continued as part of sponsorship of the popular<br />
television series Junior Masterchef, highlighting the<br />
nutritional benefits of eating red meat three to four<br />
times per week. A total of 150,000 brochures on<br />
“How to make every bite count” were distributed<br />
to new mothers informing them about the value<br />
of including red meat in their infants’ diets as a<br />
source of iron and zinc. The ‘Red <strong>Meat</strong> EnergiZn<br />
Life’ campaign provided information to 21,000<br />
healthcare professionals about the benefits of<br />
the iron and zinc in red meat to maintain energy<br />
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Maintaining the current industry microbiological<br />
benchmarks and ensure that methodologies to<br />
analyse trends enabled national reporting is also<br />
a focus of thisprogram. The current analysis<br />
demonstrates that figures have remained stable or<br />
trended favourably, therefore providing the industry<br />
with significant confidence in product safety and<br />
the ability to communicate this confidence to<br />
trading partners.<br />
KEY FOCUS AREA:<br />
DEMONSTRATING PRODUCT INTEGRITY<br />
The approaches taken by the program are based<br />
on sound science, risk assessment and new<br />
management strategies and focus on three key<br />
areas:<br />
1. Consultation with stakeholders on the strategy,<br />
direction and themes for the program to ensure<br />
it meets industry requirements;<br />
2. Scientific discovery and knowledge generation<br />
to find new ways of managing food safety<br />
hazards along the supply chain;<br />
3. Using scientific knowledge to facilitate change<br />
and further developments within the industry<br />
by communicating and collaborating with<br />
stakeholders.<br />
The Food Safety Program focuses on<br />
communicating knowledge about food safety risks<br />
in the red meat supply chain, and their control,<br />
so that industry, regulators and the marketplace<br />
worldwide are satisfied that risks are being<br />
controlled effectively. The communications<br />
components ensure that the high level of food<br />
safety of <strong>Australian</strong> meat is acknowledged.<br />
The industry’s food safety reputation has been<br />
strengthened by the publication of the many<br />
scientific papers and presentations given to food<br />
industry and food safety conferences in Australia<br />
and USA.<br />
“Maintaining focus on food safety outcomes”<br />
Scientific information and advice has helped<br />
FSANZ to come to the conclusion that there are no<br />
uncontrolled risks in the red meat supply chain.<br />
We will continue to support FSANZ as they develop<br />
the new meat Primary Production and Processing<br />
Standard. A system that allows processors to<br />
benchmark their carcase hygiene data against<br />
national norms is being trialled which will enable<br />
processors to determine how their performance<br />
compares to other exporters and implement<br />
continual improvement in meat safety and quality.<br />
Research and development (R&D) investments<br />
have focussed on testing for E. coli O157 in<br />
manufacturing beef in international markets,<br />
particularly the United States (US). This research<br />
enabled industry to compile data demonstrating<br />
that <strong>Australian</strong> beef is free from a number of<br />
additional E. coli strains that are of growing<br />
concern to the US Government. Considerable<br />
advice has been provided to industry, AQIS and<br />
customers over the past year on control and testing<br />
of E. coli O157 to reduce the risk of product<br />
rejection in the USA (i.e. US regulatory testing) and<br />
maintain confidence. AMPC has assisted AMIC in<br />
the development of data collection and analysis<br />
projects to underpin the effective implementation<br />
of the <strong>Australian</strong> Export <strong>Meat</strong> Inspection System<br />
(AEMIS).<br />
The National Livestock Identification System (NLIS)<br />
underpins the integrity and safety of <strong>Australian</strong><br />
red meat by providing traceability from property<br />
of birth to slaughter. This is critical to achieving<br />
market access gains, such as into the European<br />
Union (EU) and other trading partners. The NLIS<br />
database is administered by NLIS Ltd, a subsidiary<br />
of MLA. AMPC contributes with other red meat<br />
partners towards the continual improvement of<br />
the NLIS system. A recent project includes the<br />
development of e-commerce training to ensure<br />
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consistent application of NLIS at processing plants<br />
and across the supply chain.<br />
Research has validated the knowledge of the<br />
<strong>Australian</strong> industry, that with attention to<br />
slaughter conditions, hygiene and good cold chain<br />
management, both beef and lamb can reach shelflives<br />
that were previously unimaginable. A project<br />
which investigated the inspection of lymph nodes<br />
during post mortem inspection procedures found<br />
that a substantial proportion of nodes contained<br />
high levels of bacteria, with indications of the<br />
presence of food-borne pathogens. Changes in<br />
post mortem inspection practices for tuberculosis<br />
have been approved by the United States, in part<br />
because the changed practices will result in a<br />
lower likelihood of meat being contaminated with<br />
pathogenic bacteria. The reduced post-mortem<br />
inspection will save <strong>Australian</strong> processors $5-6m<br />
per annum.<br />
UPDate<br />
AMPC in partnership with MLA will continue<br />
to seek opportunities to apply science to the<br />
development of food standards, regulations and<br />
approaches that may improve public health and<br />
ensure a continued favourable trading position for<br />
the industry.<br />
The Program will increase focus on R&D in<br />
product, process and systems and adoption<br />
activities, as well as communication with public<br />
health organisations and the community.<br />
For the final report and/or update on projects/programs contact AMPC or visit the AMPC website<br />
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levels and combat fatigue. Further strategies to<br />
grow demand in the domestic market has been<br />
based around making lamb a routine purchase by<br />
building national pride and by strengthening the<br />
consumers’ emotional bonds with beef.<br />
Maintaining the integrity of our product is vital<br />
for ensuring ongoing consumer confidence in red<br />
meat. Projects this year were focussed on building<br />
support for red meat through working with retailers<br />
and foodservice operators to raise standards<br />
of presentation, quality, merchandising and<br />
promotion. One key example, the <strong>Meat</strong> Standards<br />
Australia (MSA) program, gives consumers the<br />
assurance of a consistently high quality eating<br />
experience, with its predictive power backed by<br />
results from more than 420,000 consumer taste<br />
tests. This year, MSA reached a critical mass of<br />
product with 1.42 million cattle and 870,500 sheep<br />
graded.<br />
“Qualitative and Quantitative research into<br />
consumer needs and practices”<br />
AMPC has supported research projects<br />
which explored the issues of consistency and<br />
uniformity in red meat eating quality and which<br />
can conceivably enhance consumers’ eating<br />
experiences with red meat products. This research,<br />
coupled with ongoing nutrition investigations, is<br />
considered vital to driving demand for red meat - a<br />
key priority area for investment under the current<br />
<strong>Meat</strong> Industry Strategic Plan (MISP).<br />
review of the <strong>Australian</strong> dietary guidelines to<br />
highlight the importance of eating red meat three<br />
to four times a week as part of a balanced diet.<br />
AMPC endorses the ongoing dialogue with peak<br />
professional bodies and government to build an<br />
updated nutrient composition database, science<br />
based dietary recommendations, and long-term<br />
relationships with the Dieticians Association of<br />
Australia (DAA) the Heart Foundation and health<br />
care professionals through medical journals and<br />
conferences.<br />
UPDate<br />
AMPC in partnership with MLA will continue<br />
to develop strategies to promote <strong>Australian</strong> red<br />
meat products and enhance marketing<br />
activities in key emerging markets in South-East<br />
Asia and the Middle East.<br />
AMPC, in partnership with MLA will launch a<br />
new nutrition campaign ‘Ready for Anything’ and<br />
improve policy maker awareness of the nutrition<br />
and integrity of red meat. Additionally further<br />
actions will include extending the ‘Nothing beats<br />
Beef’ and ‘We love our Lamb’ campaigns to<br />
strengthen seasonal demand for red meat and<br />
continue foodservice campaigns.<br />
“Building and maintaining consumer<br />
confidence”<br />
Research supported by AMPC underpinned MLA’s<br />
recent submissions to the <strong>Australian</strong> Government’s<br />
National Health and Medical Research Council’s<br />
For the final report and/or update on projects/programs contact AMPC or visit the AMPC website<br />
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“Addressing and exceeding customer<br />
and community expectations through<br />
responsible & ethical processing<br />
practices”<br />
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REPORT TO STAKEHOLDERS<br />
section 5: SUSTAINABLE & RESPONSIBLE PROCESSING<br />
PRACTICES THAT MEET COMMUNITY expectationS<br />
The <strong>Australian</strong> red meat processing industry<br />
considers that meeting and exceeding customer,<br />
Government and community expectations for<br />
responsible and ethical industry practices is of<br />
paramount importance.<br />
Resources such as water, soil and energy are<br />
precious and sustaining the natural resource base<br />
is critical to industry sustainability. Companies<br />
in the processing sector are increasingly keen for<br />
social and economic reasons to minimise their<br />
environmental impact and to use all resources<br />
wisely.<br />
Demonstrating responsible practices, including<br />
high standards of animal health, welfare and<br />
biosecurity, are also critical to maintaining market<br />
access and ensuring industry remains viable and<br />
productive. The red meat processing industry is<br />
committed to the highest levels of animal welfare<br />
standards and the humane treatment of livestock.<br />
This is an unconditional expectation of our industry<br />
and the consumers of our red meat products.<br />
Further, systems and practices relating to livestock<br />
management, including animal health, disease<br />
surveillance, biosecurity and traceability are all<br />
important aspects of an integrated, sustainable<br />
and successful meat processing supply chain.<br />
KEY FOCUS AREA: SUSTAINING THE<br />
natural RESOURCE BASE AND MANAGING<br />
CLIMATE CHANGE IMPACTS<br />
Recent activity has focussed on developing<br />
models and tools to measure current resource<br />
sustainability and the sustainability performance of<br />
the meat processing sector.<br />
These measures were designed to reflect<br />
the expected impacts of climate change and<br />
associated environmental regulation and to<br />
establish correct impact information for red meat<br />
product produced in Australia.<br />
Research has also included investigations into<br />
alternative technologies that will improve energy<br />
efficiency, waste management and water efficiency<br />
and re-use. Efforts are underway to further<br />
develop and refine tools to measure the impact<br />
of processing and supply chain management<br />
practices on natural resources and to better<br />
understand and communicate the impact of<br />
climate change on meat processing enterprises and<br />
the supply chain. The following sections present<br />
some of the highlights from the year.<br />
AMPC directs RD&E investment to the following key<br />
focus areas.<br />
• Sustaining the natural resource base and<br />
managing climate change impacts, and;<br />
• Promoting industry value through improvement<br />
in livestock management and supply chain<br />
integration.<br />
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UPDate<br />
AMPC is now working on a meat processing<br />
industry RD&E Strategy for Climate Change<br />
that will address projects required to mitigate<br />
carbon emissions and provide a mechanism<br />
to communicate with government on industry<br />
needs under the new Carbon Pricing Scheme.<br />
Additionally, AMPC is working on a series of<br />
engagement workshops to assist processors in<br />
meeting NGERS requirements into the future.<br />
AMPC is a member of the Climate change<br />
RD&E strategy, facilitated by the University<br />
of Melbourne and will communicate red meat<br />
processing priorities through this forum.<br />
AMPC is also working with small-medium<br />
members to address energy efficiency and other<br />
waste management options that have resulted<br />
from recent research.<br />
• Sites should investigate installing additional<br />
metering for departmental operations.<br />
UPDate<br />
The Energy Savings Calculator and Energy<br />
Allocation Tool are available from AMPC.<br />
“Addressing climate change challenges”<br />
EVISCERATION TABLE WATER REUSE<br />
The purpose of this project was to trial a process<br />
to collect and filter water from the evisceration<br />
table, for re-use in the cattle yards. Water savings<br />
were anticipated to be in excess of 250kL per<br />
day. Current best practice for medium to large<br />
integrated export meat processing plants is of the<br />
order of 5-7 kL water/tonne HSCW.<br />
ENERGY SAVINGS CALCULATOR<br />
This project involved enhancing the Energy Savings<br />
Calculator (developed under a previous industry<br />
funded project) to include greenhouse savings and<br />
management option payback periods. The output<br />
of this project is incorporated into the Energy<br />
Allocation Tool. The worksheet developed is split<br />
into electricity and thermal energy savings and<br />
identifies energy saving action items.<br />
Plants can use this tool to identify the most<br />
costly items of equipment to operate (in terms<br />
of operating cost and energy consumption). The<br />
results can then be summarised into a table which<br />
is designed to comply with the requirements of<br />
the Federal Energy Efficiencies Opportunities Act<br />
(2006). Results from plant trials of the enhanced<br />
calculator were found to include:<br />
• Sites with rendering should focus on minimising<br />
heat use (ie steam) in rendering and look for<br />
opportunities to recover waste heat from water<br />
streams. Plants without rendering should focus<br />
on the reducing consumption in the largest hot<br />
water users;<br />
• On the thermal energy balance, it would be<br />
useful to include cost estimations for each line<br />
item, as is provided in the electricity balance;<br />
“Identifying options to minimise water use,<br />
enhance recycling and develop new and<br />
sustainable technologies”<br />
Steriliser water was captured from the clean end of<br />
the viscera table. This water was passed to a 1mm<br />
static screen to remove solids. Water from the<br />
reservoir was pumped into the storage (holding)<br />
tank throughout the entire process. This water was<br />
then used in wash-down of the cattle holding yards.<br />
At the trial site, results showed that the cost<br />
savings were estimated at approximately $1,200<br />
per week. For a project of this nature to be carried<br />
out within an older plant, it was considered that a<br />
longer period of time may be required to identify<br />
and problem solve some of the contributing<br />
factors.<br />
It was found that during storage bacteria counts<br />
in the recovered water increased and making the<br />
water unacceptable for reuse. Potential next steps<br />
include investigating the viability of chlorinating<br />
the water to achieve a higher quality standard.<br />
When examining water re-use options, processors<br />
need to establish a risk matrix to determine the<br />
process and system monitoring required to meet<br />
acceptability for regulators including AQIS, OH&S,<br />
EPA and QA.<br />
“Modelling energy use at processing works<br />
to improve efficiency and identify energy<br />
savings”<br />
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UPDate<br />
Next steps will include increasing testing points<br />
along the flow line to isolate potential areas<br />
of bacteria colonization and investigating the<br />
viability of sterilization options to achieve a<br />
higher water quality suitable for other fit for<br />
purpose re-use applications within the plant.<br />
The five main areas identified were:<br />
1. High efficiency belt and tunnel washing<br />
systems;<br />
2. Mechanical floor scrubbing systems;<br />
3. Design for clean ability guide;<br />
4. High pressure washing; and<br />
5. Clean in place (CIP) systems.<br />
“Examining water re-use options and gaining<br />
regulator acceptance for more efficient and<br />
sustainable processing practices”<br />
WATERLESS CLEANING - EXAMINING THE<br />
POTENTIAL FOR RD&E<br />
Approximately 20-33% of water use in modern<br />
meat processing plants is for daily plant and<br />
equipment cleaning. Industry has made significant<br />
inroads into reducing on-plant water consumption<br />
in the past five years, as indicated in recent<br />
environmental reports, however, the adoption<br />
of drier cleaning systems commensurate with<br />
maintaining food safety excellence is an approach<br />
that merits investigation.<br />
Following a 2009 project titled ‘Waterless cleaning<br />
of meat processing plants’, an Industry Working<br />
Group was assembled by AMPC to review the<br />
findings of the previous project and to set a<br />
roadmap of projects to capture the benefits of<br />
waterless cleaning and overcome the barriers to<br />
adoption.<br />
UPDate<br />
Scope for future RD&E that was identified<br />
included conveyor belt washing (Boning room,<br />
Slaughter floor), tunnel washing for discrete<br />
items, (floor mats, cutting boards, etc), a focus on<br />
the Viscera table washing/sterilisation systems,<br />
robotic floor cleaning under carcasses in chiller<br />
rooms, an opportunities for water reuse.<br />
CREATION OF THE ANAEROBIC LAGOON<br />
KNOWLEDGE CENTRE<br />
There is currently a lack of knowledge within the<br />
red meat industry regarding design and operation<br />
of Anaerobic Lagoons (ALs) and upgrading these<br />
to Covered Anaerobic Lagoons (CALs) to minimise<br />
GHG emissions from wastewater treatment<br />
operations.<br />
ALs are major GHG emitters and while the basic<br />
science involved in minimizing these emissions, via<br />
covering the lagoons is relatively well known, there<br />
are currently major technical knowledge gaps in<br />
relation to the design, operation and maintenance<br />
of CALs in the industry.<br />
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The objective of this project is to develop a<br />
knowledge centre with respect to CALs, particularly<br />
information relating to the design, construction,<br />
operation and maintenance of CALs that offer<br />
biogas harvesting and combustion to generate<br />
renewable energy. It is proposed to construct<br />
a website that houses the collected knowledge,<br />
in the form of an expert system, for use by<br />
industry members to improve the operation and<br />
environmental performance of their ALs and<br />
improve environmentally sustainability.<br />
The first phase of this project has been the<br />
development of the roadmap for this anaerobic<br />
lagoon knowledge centre (ALKC). The generic<br />
approach was to run workshops, the first with<br />
industry representatives and the second with<br />
external stakeholders, to obtain an understanding<br />
of the current knowledge base of the industry and<br />
more importantly to identify knowledge gaps.<br />
These two workshops identified thirty major<br />
technology and information knowledge gaps within<br />
the industry and these were prioritised to develop<br />
the nine top priority knowledge gaps.<br />
During the financial year <strong>2011</strong>/12 AMPC & MLA<br />
will prepare a scope of works to review and<br />
assess improved processes for the removal of<br />
grit and screenings (oil and grease) from abattoir<br />
wastewaters, conduct a global literature review of<br />
ALs and CALs used in the red meat industry and<br />
conduct the cost benefit analysis.<br />
“Managing and sustaining the natural<br />
resource base”<br />
UPDate<br />
To date the roadmap has identified eight<br />
key knowledge gaps within the industry and<br />
recommended projects to fill these knowledge<br />
gaps. It has also recommended an approach to<br />
consider for the maintenance of the knowledge<br />
centre into the future. The data generated by<br />
this knowledge centre will assist the industry<br />
to continually improve their environmental<br />
performance with respect to wastewater<br />
treatment.<br />
COVERED ANAEROBIC LAGOONS<br />
Anaerobic lagoons are a critical component of<br />
existing wastewater treatment systems treating raw<br />
meat processing wastewater. Whilst these lagoons<br />
provide a highly cost effective way of reducing<br />
organic loadings they do have weakness including:<br />
• A risk of offensive odour production, especially<br />
where a naturally forming floating crust does<br />
not form, or erodes; and<br />
• The release of very significant quantities of<br />
methane which is an important greenhouse gas.<br />
This project reviewed the outcomes and learning’s<br />
of the retrofitting of a cover to an existing meat<br />
processing anaerobic lagoon to capture methane<br />
gas for electrical generation on site.<br />
“Developing industry resources to ensure<br />
sustainable practices and capability<br />
building into the future”<br />
Comments on the operation of the covered<br />
anaerobic pond include:<br />
• Crust accumulation necessitated treatment with<br />
enzymes;<br />
• During the time the CAL was operational,<br />
production increases led to biogas flows much<br />
higher than anticipated. The flare system<br />
struggled with this biogas volume resulting<br />
in poor combustion of excess biogas leading<br />
to odour issues, high flame levels exposing<br />
neighbours to visible light, and excess noise;<br />
• Extremely high levels of Hydrogen Sulphide<br />
gas (in excess of the design value) were also<br />
experienced posing a potential corrosion hazard<br />
to electrical generation equipment;<br />
• The original design was to utilise the biogas<br />
fired generator set to export electricity back<br />
to power grid. Negotiations with the electrical<br />
utility proved so difficult that this approach had<br />
to be abandoned.<br />
The major learning from this project is that<br />
considerable and significant design, operation,<br />
maintenance and regulatory knowledge gaps<br />
remain in relation to the adaption of methane<br />
recovery and re-use systems for meat processing..<br />
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UPDate<br />
Based on the outcomes of this work and other<br />
experiences of the challenges faced in developing<br />
methane recovery projects for red meat<br />
processing in Australia AMPC has implemented<br />
a broader strategy to address critical knowledge<br />
gaps with regard to the successful development<br />
of methane recovery and use projects. Data<br />
from this project will be collated with similar<br />
monitoring and evaluation projects at three other<br />
meat processing CAL sites and contribute to the<br />
development of the AMPC Anaerobic Lagoon<br />
Knowledge Centre project.<br />
ECONOMIC AND TECHNICAL POTENTIAL FOR<br />
COGENERATION<br />
This work investigated and quantified the economic<br />
and technical potential for cogeneration in red<br />
meat processing. Cogeneration is the combined<br />
production of electricity and thermal energy<br />
(heating and/or cooling) from the one fuel source.<br />
Thermal energy can be produced as hot water,<br />
steam or cold water via absorption refrigeration.<br />
Cogeneration is ideally suited to the red meat<br />
industry as it uses heat and electricity at the same<br />
time and requires only low pressure steam (800-<br />
1200 kPa) for rendering. This can be provided by a<br />
gas engine or gas turbine cogeneration system.<br />
A cogeneration plant can be designed to meet site<br />
requirements in terms of electricity and heating/<br />
cooling, but can also be designed to provide<br />
backup power in the event of electricity supply grid<br />
failure. Cogeneration plants are most economic<br />
when the electricity and heating/cooling is required<br />
at the same time and when this occurs during peak<br />
electricity tariff periods.<br />
The primary benefit of cogeneration is reduced<br />
energy supply costs, but it also substantially<br />
reduces the total site greenhouse emissions from<br />
energy use by 40-70%.<br />
The benefits of adopting cogeneration are<br />
• Reduced on-site energy costs;<br />
• Increased reliability and quality of electricity<br />
supply;<br />
• Reduced greenhouse gas emissions;<br />
• Reduced sensitivity to future electricity price<br />
rises;<br />
• Promotes liberalisation and competition in<br />
energy supply market;<br />
• Opportunity to use renewable fuels, such as<br />
biomass and biogas.<br />
Cogeneration utilising renewable fuels has a<br />
significantly lower emissions intensity than grid<br />
supplied electricity. This can include biomass<br />
using a boiler and steam engine or turbine system<br />
or biogas from ponds in a gas engine or turbine<br />
system.<br />
“Examining technologies for energy<br />
efficiency and the application of renewable<br />
energy options in meat processing”<br />
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UPDate<br />
Although cogeneration is technically feasible, it<br />
generally has a payback period of more than 5<br />
years. However, the advent of a carbon price will<br />
improve the economic signals for cogeneration,<br />
due to its significantly lower greenhouse gas<br />
emissions intensity. This changing operating<br />
circumstance coupled with the impact on viability<br />
for this technology from additional energy costs<br />
passed through for electricity and fuel supply<br />
options for a cogeneration plant will be the<br />
subject of future analysis moving forward.<br />
AMPC has committed funds for a more detailed<br />
paunch waste and DAF sludge characterisation<br />
study which will provide a better indication of<br />
whether pyrolysis and gasification could be costeffective<br />
processing systems for abattoir waste,<br />
once cogeneration and carbon pricing and credit<br />
systems are built into the estimates.<br />
UPDate<br />
AMPC has committed funds for a more detailed<br />
paunch waste and DAF sludge characterisation<br />
study which will provide a better indication of<br />
whether pyrolysis and gasification could be cost<br />
effective processing systems for abattoir waste,<br />
once cogeneration and carbon pricing and credit<br />
systems are built into the estimates.<br />
WASTE TO ENERGY - ALTERNATIVE USES<br />
FOR PAUNCH WASTE AND DAF SLUDGE AND<br />
PILOT TESTING OF PYROLYSIS<br />
Research is being conducted to improve abattoir<br />
waste management practises, reduce disposal<br />
costs, minimise fossil fuel consumption and<br />
investigate the potential for generation of<br />
renewable energy. One enabling technology that<br />
could achieve these goals is pyrolysis and the<br />
initial study involved a review of technologies and<br />
identified waste pyrolysis as having potential to<br />
process abattoir wastes. Preliminary economic<br />
analysis revealed that pyrolysis of abattoir wastes<br />
could be commercially attractive and that this<br />
process could reduce the carbon footprint of<br />
abattoirs.<br />
The pilot studies demonstrated that thermal<br />
processing of abattoir solid wastes such as<br />
paunch waste and DAF sludge is technically<br />
feasible at a commercial scale. Processes such as<br />
pyrolysis and gasification offer the most significant<br />
environmental benefits, particularly significant<br />
reductions in GHG emissions compared to the<br />
current disposal practises of composting and<br />
landfilling of these wastes. It is estimated that for<br />
abattoirs producing 20 dry tpd of paunch waste<br />
and DAF sludge that GHG reductions of up to 5000<br />
tpa of CO2e can be achieved if these wastes are<br />
pyrolysed rather than landfilled and composted.<br />
These processes do come at a cost, however, which<br />
is estimated at between $65 and $90 per wet<br />
tonne of feedstock.<br />
“Value adding from waste products”<br />
THE INDUSTRY ENVIRONMENTAL<br />
SUSTAINABILITY REVIEW<br />
This Industry Environmental Sustainability<br />
Review project is the third in the series. It aims to<br />
quantitatively assess how the red meat industry<br />
has improved environmental performance in<br />
recent years, allow processors to assess how<br />
changed practices and facilities have resulted in<br />
better performance since the previous study, allow<br />
comparison against objective industry performance<br />
data and allow external stakeholders to objectively<br />
assess how the industry as a whole has improved<br />
and demonstrated continual improvement in<br />
environmental sustainability.<br />
“Benchmarking environmental performance”<br />
UPDATE<br />
AMPC has committed to continuing these<br />
benchmarking snapshots of industry<br />
environmental performance into the future and to<br />
refining the sensitivity of data collected to better<br />
reflect and account for the influence on metric<br />
determination of key performance co-factors<br />
related to industry variability such as scale,<br />
operational processes and geographical location.<br />
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KEY FOCUS AREA:<br />
PROMOTING INDUSTRY Value<br />
THROUGH IMPROVEMENT IN LIVESTOCK<br />
MANAGEMENT AND SUPPLY CHAIN<br />
INTEGRATION<br />
Recent activity under this focus area has involved<br />
the continual implementation of the industry’s<br />
National Animal Welfare Standards, including a<br />
review of the <strong>Australian</strong> legislation against that in<br />
the European Union.<br />
Studies have included benchmarking animal<br />
welfare performance as well as delivering training<br />
(via MINTRAC) for the Animal Welfare Officer<br />
SkillsSet – now a requirement of many customers<br />
and retailers. Further work has commenced to<br />
develop livestock handling training and support<br />
materials and to review the joint AMPC/AMIC<br />
animal welfare strategy. AMPC is a partner of the<br />
national Animal Welfare RD&E Strategy, a strategy<br />
under the Primary Industries Ministerial Council<br />
RD&E Framework that was recently endorsed by<br />
Ministers. Within this Strategy, AMPC is seeking<br />
to collaborate with other Rural Research and<br />
Development organisations towards research that<br />
will enhance our understanding of community<br />
attitudes and buying behaviour and develop tools<br />
for the fundamental assessment of animal welfare<br />
in terms of behavioural, animal preference and<br />
physiological measures.<br />
Priorities in the future will include:<br />
• Investigating, understanding, monitoring and<br />
managing customer and community attitudes to<br />
the red meat industry and supply chain;<br />
• Improving animal health, welfare and<br />
biosecurity through best practice;<br />
• Enhancing disease surveillance programs<br />
through collaborative projects across the red<br />
meat supply chain;<br />
• Implementing biosecurity standards and<br />
associated training in endemic and exotic<br />
disease management;<br />
• Developing emergency management guidelines<br />
for red meat processors;<br />
• Developing livestock handling training and<br />
materials;<br />
• Implementing e-learning for traceability<br />
(focussing on National Vendor Declarations and<br />
the National Livestock Identification Scheme);<br />
• Addressing customer and regulatory<br />
requirements with evidence-based science that<br />
will facilitate informed policy decisions and<br />
communicate the meat processing industry’s<br />
outcomes against our high standards.<br />
AMPC is now working on a series of projects<br />
including verification of traceability practices,<br />
livestock handling training package development,<br />
benchmarking animal welfare standards and<br />
promotion of <strong>Australian</strong> animal welfare practices<br />
in processing plants, as well as investigations<br />
to measure bruising and monitor animal health<br />
status.<br />
COST BENEFIT STUDY OF E-SURVEILLANCE<br />
SYSTEM FOR ANIMAL HEALTH MONITORING<br />
E-Surveillance is the process of collecting and<br />
recording information on carcases and offal<br />
during the abattoir meat inspection process using<br />
computer-based systems, with the information<br />
made available to producers and animal health<br />
authorities to improve farm productivity and<br />
market access.<br />
E-surveillance allows each stakeholder to have a<br />
better understanding of the impacts of endemic<br />
disease on profitability within their segment of the<br />
supply chain. Ten important diseases/conditions<br />
of sheep and lambs detectable by routine meat<br />
inspection processes were chosen for the study.<br />
The economic losses of these, to both the producer<br />
and processor sectors, were calculated using<br />
disease prevalence and carcase condemnation<br />
data, as well as via a survey of selected abattoirs.<br />
The financial benefits to farmers and processors<br />
of managing the diseases/conditions on-farm were<br />
calculated.<br />
“Integrated supply chain approaches to<br />
traceability and feedback on production<br />
outcomes”<br />
Analysis of the potential implementation of an<br />
E-Surveillance system on the small stock chain of<br />
<strong>Australian</strong> abattoirs showed a benefit cost ratio of<br />
3.3 for an E-Surveillance system covering the ten<br />
diseases/conditions. Benefits included:<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 41
• Early detection of emerging diseases through<br />
syndromic surveillance;<br />
• Monitoring of endemic disease to could assist<br />
producers in making management decisions to<br />
improve profitability; and<br />
• Potential to increase the level of complying<br />
product entering processing plants, thereby<br />
reducing processing costs.<br />
UPDate<br />
Information obtained from this study will inform<br />
the development of a pilot project which will need<br />
to address considerations around development<br />
of a model to deliver cost effective delivery of<br />
the benefits identified.<br />
As part of the livestock processing sector’s<br />
continued commitment to animal welfare, in 2009,<br />
AMIC and AMPC initiated a review to ensure the<br />
Standards continue to be relevant, practical and<br />
deliver good animal welfare outcomes.<br />
The review was designed to address changing<br />
industry practices, new scientific findings, changes<br />
in national and international legislative and<br />
commercial standards and changes in community<br />
expectations. Further, the review aimed to assess<br />
the uptake of the Standards in industry and<br />
consider improvements in the extension and<br />
training delivered to the industry for animal welfare.<br />
“Ensuring high standards of animal welfare<br />
are demonstrated”<br />
REVISING THE NATIONAL PROCESSING<br />
INDUSTRY ANIMAL WELFARE STANDARDS<br />
In 2005, the <strong>Australian</strong> <strong>Meat</strong> Industry Council,<br />
in collaboration with the Animal Welfare Science<br />
Centre (AWSC) developed and launched National<br />
Animal Welfare Standards for Livestock Processing<br />
Establishments (the ‘AMIC Standards’). The AMIC<br />
Standards were designed to reflect the legislative<br />
and commercial requirements for animal welfare in<br />
Australia, relevant scientific literature and current<br />
best practice. AMPC supported the development of<br />
these Standards.<br />
An Animal Welfare Standards Review Committee<br />
(AWSRC) was established to oversee the project. The<br />
results included national benchmarking of animal<br />
welfare practices and measures of compliance<br />
against the standards, as well as revising the<br />
standards to reflect current practice, customer<br />
expectations, new regulation and relevant scientific<br />
literature. As part of the project, the training<br />
delivered across industry was revised.<br />
UPDate<br />
The revised Animal Welfare Standards are<br />
published via the members section of the AMIC<br />
website (www.amic.org.au), or available in<br />
hard copy from the AMPC and AMIC offices<br />
or processor members of both companies.<br />
Information on training is available through<br />
MINTRAC (www.mintrac.com.au). Further<br />
materials for processor communication to their<br />
customers will be made available shortly.<br />
DEVELOPING INDUSTRY CAPABILITY TO<br />
ADDRESS CHANGES TO ANIMAL WELFARE<br />
REQUIREMENTS<br />
The recommendations provided in the final report<br />
focus on identifying the changes to the <strong>Australian</strong><br />
animal handling, slaughtering and welfare training<br />
required to meet the EUs importing country<br />
requirements as of the 1 January 2013.<br />
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UPDate<br />
A successful meeting with the EU was held,<br />
where it was recognised that the <strong>Australian</strong> meat<br />
processing industry had taken significant steps<br />
to demonstrate high standards of animal welfare<br />
that are compliant with requirements. Strategies<br />
to address future EU requirements (to 2019) are<br />
now underway with AMIC, AMPC and MINTRAC.<br />
BIOSECURITY<br />
Biosecurity has become a major concern to the<br />
agriculture industry as a result of foreign and<br />
emerging endemic and exotic disease issues,<br />
globalization of agriculture and increasing public<br />
concerns over food safety. The Emergency Animal<br />
Disease Response Agreement (EADRA) between<br />
government and industry ensures funds to combat<br />
an Emergency Animal Disease (EAD) are made<br />
available and commits industry and Government<br />
to take reasonable steps to minimise the risks<br />
by implementing biosecurity plans. Governments<br />
are now discussing the need for future legislative<br />
standards to ensure compliance and prevention<br />
of disease risks. For industry, a biosecurity plan<br />
should contain all the measures that are utilised to<br />
mitigate the risks of disease entry or spread.<br />
“Protecting Australia’s disease free status”<br />
For the meat processing industry, it is recognised<br />
that there is a need to develop operational<br />
standards to underpin the EADRA and assist<br />
industry in preventing and responding to future<br />
biosecurity risks. AMPC, with members, has<br />
established a project to develop and implement<br />
industry biosecurity standards. A previous project,<br />
the AMIC Animal Welfare Standards (AMIC 2005),<br />
provides an example of the proposed approach for<br />
this new project. The standards will improve the<br />
application of good biosecurity practices to prevent<br />
and manage disease and biosecurity emergencies.<br />
UPDate<br />
A national advisory committee, including<br />
members of AMIC, AMPC, Governments (State<br />
jurisdictions, AQIS and DAFF) and scientific<br />
organisations, will develop the standards for<br />
managing biosecurity in the processing industry.<br />
This project is underway and will be further<br />
reported in the coming year.<br />
TRACEABILITY<br />
The National Livestock Identification System (NLIS)<br />
is Australia’s system for identifying and tracking<br />
livestock for food safety, biosecurity, market access<br />
and industry-related purposes.<br />
Recently, AMPC and AMIC identified a need to<br />
consider a framework for further training on NLIS<br />
systems for the meat processing industry. Staff<br />
turnover, technological developments and the<br />
need to increasingly demonstrate compliance<br />
and validate traceability are all obvious drivers for<br />
further training. To this end, discussions were held<br />
with three State jurisdictions (DEEDI Queensland,<br />
Industry and Investment New South Wales and DPI<br />
Victoria) regarding the need for a project covering<br />
NLIS training for processors.<br />
“Improvement in livestock management<br />
practices”<br />
AMPC and AMIC have established a project to<br />
develop an e-learning package for the red meat<br />
processing sector for NLIS. Alignment with<br />
the existing NLIS database and agreement,<br />
the Extended Residue Program (ERP) and the<br />
NLIS device and PIC based status systems will<br />
be included. The outcomes for industry and<br />
collaborating organisations will be the improved<br />
application and compliance with NLIS and<br />
traceability requirements and the improved<br />
understanding and use of the ERP, PIC and device<br />
based status that will deliver product integrity,<br />
protect businesses and ensure the potential market<br />
failure as a result of residues is minimised.<br />
UPDate<br />
The outcomes for industry and collaborating<br />
organisations will be the improved application<br />
and compliance with NLIS and traceability<br />
requirements and the improved understanding<br />
and use of the ERP, PIC and device based<br />
status that will deliver product integrity, protect<br />
businesses and ensure the potential market<br />
failure as a result of residues is minimised<br />
For the final report and/or update on projects/programs contact AMPC or visit the AMPC website<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 43
“Building leadership, capability<br />
& capacity through innovation”<br />
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REPORT TO STAKEHOLDERS<br />
section 6: INDUSTRY AND STAKEHOLDERS ARE<br />
ENGAGED AND CAPABLE<br />
The value of research and development is only<br />
delivered when outcomes are taken up and<br />
successfully implemented by enterprises along the<br />
value chain.<br />
A review of the national innovation system in<br />
2008 recommended the creation of an innovation<br />
system as has been proposed in other countries.<br />
More attention is now being paid to improving the<br />
capacity of private firms to apply the products<br />
of science and research, and to understand how<br />
boosting this capacity and improving their business<br />
models will better serve market and customer<br />
needs and secure productivity benefits.<br />
At the national level, through the Primary<br />
Industries Ministerial Council (PIMC), states<br />
and territories, as well as RDC, are developing a<br />
National Primary Industries RD&E framework.<br />
Building critical mass in capability is essential for<br />
a more efficient and effective innovation system<br />
and none moreso than for climate change which<br />
is a major priority area for the red meat industry.<br />
Consequently, AMPC will continue its collaborations<br />
with other red meat industries and influencing<br />
these and other RD&E provider and investor<br />
organisations to focus effort into their strategically<br />
important and regionally specific capabilities and<br />
industries and relinquish less important areas<br />
to their collaborators in accordance with the<br />
Framework.<br />
The AMPC continues to support the use of detailed<br />
off-farm adoption strategies to realise the full<br />
benefit of R&D investments. As well, there have<br />
been further cost/benefit and evaluation reports<br />
completed on the value proposition and cost/<br />
benefits of proposed technologies.<br />
More of our processor members have developed<br />
their own tailored Innovation Strategies which<br />
comprise a program of innovation and adoption<br />
designed to drive organisational and industry level<br />
cultural change. The Undergraduate and Graduate<br />
Programs give students the chance to work in<br />
the industry with the view to it being a career<br />
choice, and this program also assists processing<br />
companies to attract and support young<br />
professionals in the early parts of their careers.<br />
AMPC, in collaboration with MLA, is now working<br />
on developing a new capability program that<br />
will harness investments in post-graduate,<br />
undergraduate, up-skilling and training delivered.<br />
To achieve this, AMPC will be contributing to a<br />
benchmarking exercise to identify key capability<br />
needs into the future, both for industry and<br />
research organisations. AMPC will also be<br />
examining new and innovative ways to engage<br />
industry in practice change through targeted<br />
education programs and workshops. These will<br />
include capability building in areas such as<br />
environmental management, waste water and<br />
waste management, new product development and<br />
engineering.<br />
MINTRAC – MEAT INDUSTRY LEADERSHIP<br />
DEVELOPMENT<br />
The proficiency of personnel in the meat industry<br />
is an important factor contributing to ongoing<br />
market access for the <strong>Australian</strong> meat industry.<br />
To deliver on this aim, AMPC supports a range of<br />
projects under a service agreement with the <strong>Meat</strong><br />
Industry Training and Advisory Council (MINTRAC).<br />
MINTRAC is internationally recognised for its<br />
expertise in developing training and professional<br />
development solutions to the industry.<br />
“Engaging industry to deliver practice<br />
change”<br />
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For the past four years MINTRAC, with support and<br />
funding from AMPC, has maintained a series of<br />
Networks. These include:<br />
• The <strong>Meat</strong> Inspectors & Quality Assurance<br />
Managers (MI&QA) Network;<br />
• The Environmental Managers Network;<br />
• The Training Network.<br />
These Networks operate Australia-wide with the<br />
aim of improving communications in this area of<br />
the industry and enhancing the professionalism of<br />
practitioners. The objectives of these Networks are<br />
to:<br />
• facilitate communication between industry and<br />
regulators;<br />
• identify training requirements for industry;<br />
• facilitate research being broadcast to the<br />
industry;<br />
• conduct professional development sessions to<br />
address immediate and specific information<br />
requirements.<br />
Network meetings help to facilitate communication<br />
between industry and regulators, help companies<br />
access industry funded training and identifying<br />
training requirements.<br />
“Networks as a delivery mechanism for<br />
RD&E outcomes to members.”<br />
MEAT INSPECTION AND QUALITY<br />
ASSURANCE 2010-<strong>2011</strong><br />
Fourteen Quality Assurance Managers’ Network<br />
meetings were held during 2010-<strong>2011</strong>, with<br />
representatives from 64 meat processing<br />
companies, seven regulatory bodies, industry<br />
associations, research agencies, registered training<br />
organisations and other companies servicing the<br />
industry. The seventh annual “<strong>Meat</strong> Inspection and<br />
Quality Assurance Conference” was held in<br />
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Melbourne and speakers addressed a range of<br />
topics from animal welfare through meat science<br />
and QA in the pet food industry. Recommendations<br />
from the conference were to focus on improving<br />
the professionalism and capacity of regulators,<br />
trainers, meat inspectors and QA personnel to<br />
meet these requirements, and ensuring that the<br />
currency of practitioners is maintained in the face<br />
of significant changes in the inspection system<br />
and changing customer and importing country<br />
requirements.<br />
ENVIRONMENT 2010-<strong>2011</strong><br />
Six Environment Managers’ Network meetings<br />
were held during 2010- <strong>2011</strong>, including a range of<br />
site visits to current industry projects. MINTRAC<br />
produced a CD which details environment<br />
management initiatives at meat processors from<br />
various States. Recommendations provided in the<br />
conference report were to focus on improving the<br />
adoption of industry research and development<br />
through the Environment Managers’ network<br />
system, as well as improving the knowledge of<br />
managers to meet what are rapidly changing<br />
community and regulatory expectations of what<br />
constitute responsible behaviour on the part of<br />
meat processing establishments.<br />
TRAINING 2010-<strong>2011</strong><br />
Twelve Training Network meetings were held during<br />
2010-<strong>2011</strong> with a range of industry research and<br />
development outcomes being discussed, new<br />
regulations and their implications for the training<br />
system. The theme for the national conference<br />
was “Training for Sustainability <strong>2011</strong>” and<br />
recommendations from the conference report<br />
were to focus on improving the adoption of<br />
industry research and development through the<br />
training system and ensuring that the currency<br />
and integrity of the system is maintained in the<br />
face of significant changes being proposed to<br />
the <strong>Australian</strong> vocational education and training<br />
system.<br />
PROFESSIONAL DEVELOPMENT<br />
The Program focussed on capability has been<br />
developed by MLA and AMPC to increase the<br />
professionalism and innovative capacity of individuals<br />
and companies in the processing sector.<br />
Increasing innovation within a company will impact<br />
directly on the overall performance, profitability<br />
and competitiveness of the business. An<br />
industry-wide culture of innovation and increased<br />
professionalism will ensure that Australia can<br />
process an increased volume of red meat, while<br />
maintaining our reputation as a supplier of a high<br />
quality product.<br />
The program contains a number of initiatives<br />
which have been developed to create awareness<br />
of the meat processing industry and the career<br />
opportunities available within it for young<br />
professionals and to encourage companies to<br />
support, develop and retain tertiary educated<br />
graduates within their organisations.<br />
The program includes the following components:<br />
• Scholarship program;<br />
• Undergraduate program;<br />
• Final year projects;<br />
• Graduate program.<br />
These programs provide an exciting opportunity<br />
for students to benefit from ‘hands on’ application<br />
of their technical training and to gain an<br />
understanding of the opportunities available in<br />
this innovative and dynamic industry. The program<br />
encompasses a wide variety of project topics and<br />
students from a broad array of degrees are able<br />
to participate. Students are encouraged to enquire<br />
if they are interested but wish to clarify if their<br />
chosen field of study is eligible for the program.<br />
Participating companies are part of a program that<br />
introduces them to the benefits of professional<br />
capability, providing a direct application of a<br />
professional discipline to improve operations on<br />
a site. Projects conducted by a student must be<br />
specific to the site and must focus on current or<br />
important issues.<br />
UPDate<br />
The Red <strong>Meat</strong> Industry Undergraduate Program is<br />
currently being enhanced to increase its focus<br />
and investment in the area of attracting,<br />
developing and retaining suitably skilled and<br />
qualified workforce for the future.<br />
For the final report and/or update on projects/programs contact AMPC or visit the AMPC website<br />
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REPORT TO STAKEHOLDERS<br />
section 7: CONTINUAL IMPROVEMENT<br />
This program supports AMPC’s focus on continual<br />
business improvement, corporate management and<br />
risk management.<br />
Demonstrated improvements have been made in<br />
the following areas:<br />
• Creating awareness of opportunities created by<br />
AMPC;<br />
• Enhancing collaboration and co-investment;<br />
• Developing the member engagement strategy,<br />
including business and RD&E Case Study<br />
circulars;<br />
• Developing materials that communicate the<br />
partnership and co-investment arrangements,<br />
outcomes and results;<br />
• Designing and conducting targeted processor<br />
forums to identify RD&E priorities and<br />
strategies for industry;<br />
• Developing and overseeing policies consistent<br />
with the company’s strategic plan and<br />
exercising direction and governance over<br />
resources and the way in which the strategies<br />
are implemented;<br />
• Improving and monitoring AMPC’s compliance<br />
with obligations;<br />
• Demonstrating changes to portfolio balance and<br />
refining processes to guide investment decision;<br />
• Measuring, reporting and improving on the<br />
value gained from investments.<br />
Key achievements include the developing of a<br />
branding policy, member circulars to update<br />
on RD&E outputs, portfolio re-structure and<br />
balance against Government and industry<br />
priorities, establishment of a process to re-fresh<br />
RD&E priorities of industry and other scientific<br />
stakeholders and enhancing collaboration and<br />
co-investment with other primary industry rural<br />
research corporations and red meat industry<br />
organisations.<br />
“Corporate and risk management”<br />
THREE YEAR PERFORMANCE REVIEW<br />
During 2010, ARCHE Consulting conducted a<br />
performance review for AMPC. The review was<br />
commissioned in accordance with the requirements<br />
of the Company’s Statutory Funding Agreement<br />
(SFA) with, the Commonwealth Government.<br />
Under this agreement AMPC is required to report<br />
to the Federal Minister for Agriculture and the<br />
Department of Agriculture, Fisheries and Forestry<br />
on the outcomes and steps taken to address the<br />
recommendations arising from the Independent<br />
Performance Review.<br />
Key findings from the review were positive and<br />
indicated that AMPC is aware of the Company’s<br />
roles and responsibilities under the Red <strong>Meat</strong><br />
Industry MOU and defines their role as a service<br />
company in the Company’s strategic and annual<br />
operating plans. Further recommendations were<br />
provided which are being addressed by the AMPC<br />
Board and Management. The review and the<br />
AMPC Management response activities to the<br />
recommendations will be available on the AMPC<br />
website.<br />
“Evaluating performance”<br />
EVALUATION<br />
AMPC has invested in collaboration with MLA<br />
towards the evaluation of shared portfolio<br />
R&D projects and programs, as well as sought<br />
further independent evaluation and review of its<br />
investments on a case by case basis during <strong>2011</strong>.<br />
Further evaluation is underway in the form of<br />
industry-wide RD&E priority mapping to inform<br />
future strategic planning and portfolio balance, as<br />
well as to ensure that R&D investments are being<br />
directed to areas of priority for both members<br />
and the Government. A series of agreed evaluation<br />
principles are being established by the Council<br />
of Rural Research and Development <strong>Corporation</strong>s<br />
(CRRDC), to assist Rural RDC’s in aligning their<br />
evaluation processes. AMPC looks forward to<br />
contributing to this process.<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 49
THE ANNUAL OPERATING PLAN<br />
The Annual Operating Plan now demonstrates<br />
better alignment with the National Research<br />
Priorities, Rural Research Priorities and with<br />
collaborating agencies’ plans, such as MLA. Efforts<br />
are now underway towards establishing plans for<br />
each specific area of the portfolio, with emphasis<br />
on both private and public good, as well as<br />
increased focus on fundamental and applied R&D<br />
deliverables.<br />
THE CONSULTATION PROCESS FOR<br />
IDENTIFYING RD&E PRIORITIES<br />
Efforts are being directed towards enhancing<br />
industry and member engagement, as well as<br />
increased interaction with all other stakeholder<br />
organisations including R&D providers and<br />
Governments, to ensure an informed and wellbalanced<br />
debate towards improving investment<br />
and delivery. AMPC is currently working with<br />
members to enhance its consultation processes.<br />
The process will result in improved arrangements<br />
to identify, report and evaluate RD&E priorities<br />
and investments – thereby better informing<br />
AMPC activities over time. To support these<br />
arrangements, biannual planning forums involving<br />
RD&E providers and the Government are proposed.<br />
MEMBER ENGAGEMENT<br />
AMPC has established a member engagement<br />
strategy to inform members of RD&E outcomes<br />
on a regular basis. AMPC has established new<br />
reporting mechanisms with which to engage its<br />
consultative committees and wider membership.<br />
AMPC has also established industry working<br />
groups that will oversee the development and<br />
delivery of specific projects and participate in<br />
reporting of outcomes for specific and critical<br />
R&D areas. The principles underpinning the<br />
member engagement strategy and the new AMPC<br />
Communications Plan are based on feedback<br />
from Government, members and the results of the<br />
independent Review of the Company by aRCHe<br />
Consulting.<br />
THE STRATEGIC PLAN<br />
AMPC is currently, in addition to revising its<br />
consultation processes, undertaking several reviews<br />
and evaluation activities for its RD&E investments<br />
on behalf of industry and the Government. As part<br />
of this process, AMPC is planning an RD&E Forum<br />
to refresh priorities and identify strategic plans for<br />
each component of the RD&E portfolio for the next<br />
3-5 years.<br />
THE POST-FARM GATE RD&E STRATEGY<br />
OPTIONS<br />
As mentioned above, the proposed RD&E forum,<br />
involving representatives from Government, CSIRO,<br />
RD&E providers and industry, will inform AMPC’s<br />
new Strategic plan and RD&E priority planning<br />
process. Further, AMPC is currently undertaking<br />
a national study to benchmark capability and<br />
investment in meat processing related RD&E – and<br />
to identify capability gaps against revised RD&E<br />
priorities. These processes will inform any future<br />
post-farm gate RD&E Strategy – considered to<br />
complement the existing Beef and Sheepmeat<br />
RD&E Strategies under the National RD&E<br />
Framework.<br />
GENERAL GOVERNANCE ACTIVITIES<br />
AMPC has revised many of its internal policies<br />
in consultation with both internal and external<br />
auditors, the AMPC Board and the AMPC Audit<br />
and Risk Committee. These review activities<br />
included the establishment of specific business key<br />
performance indicators, timetables for review of<br />
policies identification of opportunities to enhance<br />
company processes into the future.<br />
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PROGRAM HIGHLIGHTS<br />
PLANT INITIATED<br />
PROJECTS 2010-<strong>2011</strong><br />
Uptake of the AMPC Plant Initiated Projects<br />
(PIP) Program has again been strong with a<br />
total of 18 projects approved, with a further 36<br />
submissions by 30 June <strong>2011</strong>. The program<br />
continues to be a highly effective mechanism for<br />
attracting additional investment into key areas<br />
of innovation with over $30M of private sector<br />
funds leveraged directly into government and<br />
industry funded R&D programs over the last<br />
three years.<br />
Importantly, members of all sizes are<br />
successfully engaging in the program and<br />
through it contributing to the flow on of R&D<br />
benefits to the processing sector, broader<br />
industry and wider community.<br />
The PIP program was established to:<br />
• Assist AMPC members (and the broader<br />
industry) to achieve greater competitiveness<br />
through innovation;<br />
• Increase the number of processing<br />
innovations available to AMPC members;<br />
• Demonstrate and realise the commercial<br />
benefits achieved from investment in<br />
innovation to AMPC/MLA members and the<br />
wider industry.<br />
The basis for this program is to integrate, adopt<br />
and implement the outcomes of R&D that has<br />
been undertaken across industry within the<br />
broader AMPC/MLA Core R&D program, testing<br />
them ‘at the coalface’ in industry plants and<br />
sharing the findings with all AMPC members.<br />
AMPC allocates 15% of levies contributed by<br />
processors to the PIP program. Therefore, each<br />
individual processor has an allocation of 15%<br />
of their total levies paid available for use in PIP<br />
projects.<br />
The PIP program, as with other R&D programs,<br />
operates as part of a co-investment structure<br />
with other red meat industry organisations.<br />
They are traditionally funded 25% <strong>Processor</strong>,<br />
25% <strong>Processor</strong> Levy funds from AMPC and 50%<br />
Government.<br />
Plants that were once hesitant to try out a new<br />
technology or process, now invest because they<br />
can share the risk with other industry parties<br />
– either as a consortium of processors or as<br />
a single processor sharing with AMPC and<br />
the government. This has led to unparalleled<br />
investment and a process by which AMPC<br />
and MLA can fast track technology transfer to<br />
‘research-ready’ plants.<br />
“Facilitating adoption of R&D outcomes in<br />
industry through collaboration and<br />
co-investment”<br />
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To qualify, a plant-based project must aim to:<br />
• Develop or evaluate new concepts, processes or<br />
technologies or;<br />
• Seek to use existing concepts in new<br />
applications;<br />
• Demonstrate how the project will benefit the<br />
broader red meat industry and how this will be<br />
achieved.<br />
All other funds remain invested across industry in<br />
accordance with the agreed Annual Operating and<br />
Strategic Plans, in consultation with Government.<br />
<strong>Processor</strong>s undertake, with the support of project<br />
staff from AMPC and MLA, an application process,<br />
where they must:<br />
• Identify the R&D issue or problem limiting them<br />
from adopting R&D outcomes;<br />
• Identify how this issue, if overcome, could<br />
benefit broader industry and supply chain;<br />
• Work with relevant personnel from science,<br />
Government and AMPC/MLA to identify an<br />
appropriate methodology and resources for a<br />
project;<br />
• Describe and document the project, along with<br />
their own budget contribution;<br />
• Submit the project application for approval,<br />
which is subject to the eligibility criteria agreed<br />
between AMPC, MLA and Government.<br />
On completion of the PIP, results are made<br />
available to the wider industry in the form of final<br />
reports which are published on the joint AMPC/<br />
MLA website. Below provides a snapshot of some<br />
of the Plant Initiated Project RD&E outcomes<br />
throughout the year.<br />
AMPC is now developing strategies to enhance the<br />
uptake and extension of the PIP program across<br />
the membership. Discussions are underway with<br />
groups of members to syndicate towards research<br />
projects that will benefit individual processors<br />
and the industry more broadly in areas including<br />
environment, climate change and capability. More<br />
information about the PIP program in relation to<br />
previous investment, outcomes and the process to<br />
apply for PIPs will be available in a newly developed<br />
PIP package for members coming soon.<br />
BEEF SPRAY CHILLING AT JBS AUSTRALIA<br />
Spray chilling involves the intermittent spraying<br />
of carcases and sides with water during the early<br />
stages of refrigeration. The aim is to reduce the<br />
weight loss (shrink) due to evaporation of moisture<br />
from the surface tissue. Depending on the age,<br />
size, design and efficiency of beef chillers, weight<br />
loss (shrink) can vary by 1% to 3% on a typical<br />
overnight chilling regime.<br />
<strong>Australian</strong> beef processors had been reluctant to<br />
adopt the spray chilling methodology because of<br />
the fear that their excellent shelf life reputation<br />
could be compromised. Very few trials had been<br />
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carried out until JBS Australia, with the support of<br />
AMPC and MLA embarked on a pilot trial at the<br />
Dinmore processing site.<br />
JBS undertook this project with the following<br />
objectives in mind:<br />
• To reduce the effect of conventional chilling<br />
weight loss (shrink) on beef carcases;<br />
• Determine if spray chilling had any effect on<br />
shelf life and eating quality;<br />
• To determine whether saleable meat yield would<br />
increase as a result;<br />
• To determine how much water would be used;<br />
• Develop an approved Standard Operating<br />
Procedure (SOP).<br />
With proper management and application, spray<br />
chilling beef carcases has proved that carcase<br />
weight loss (shrink) can be significantly reduced<br />
compared to that of conventionally chilled<br />
carcases. Initial experiences indicated that shrink<br />
could be reduced by up to 1.5% overnight.<br />
Processed under identical methods spray chill<br />
carcases out performed conventional carcases<br />
by approximately 0.5%. This dispelled the theory<br />
that the moisture is only retained in the outer fat<br />
surface and would normally be trimmed off and<br />
used for rendering purposes only.<br />
Shelf life testing was carried out under the strict<br />
supervision and expert assistance of Food Science<br />
Australia. Samples were collected to enable<br />
microbiological testing, appearance, smell, drip<br />
and eating characteristics such as taste, texture<br />
and tenderness over a full 13 week holding period.<br />
The results showed that there were no noticeable<br />
differences in shelf life or other characteristics to<br />
suggest that correctly administered spray chilling<br />
has any detriment on beef carcases when directly<br />
compared to conventional chilled carcases.<br />
CO-GENERATION & GEOTHERMAL ENERGY<br />
UTILISATION AT MIDFIELD GROUP<br />
The Midfield Group operates two distinct<br />
processing facilities in Warrnambool, Midfield <strong>Meat</strong><br />
International and Midfield Co-Products (Midfield’s<br />
rendering division). The two sites are geographically<br />
separated by an approximate distance of three<br />
kilometres. This physical separation does not allow<br />
Midfield <strong>Meat</strong> the energy efficiency gains it would<br />
receive if rendering were located onsite, similar to<br />
that of a number of its competitors.<br />
An opportunity arose in 2005 for the Midfield<br />
Group in Warrnambool to simultaneously secure<br />
both future water supply and thermal energy<br />
through the utilisation of a geothermal aquifer<br />
network located below South West Victoria<br />
Development of the 700m deep geothermal bore<br />
at Midfield <strong>Meat</strong> in 2008 gave the site access to<br />
a licensed daily extraction of two million litres of<br />
42°C sustainable water supply. A supply which<br />
following reverse osmosis treatment would be used<br />
to augment 12°C potable water supplied to the site<br />
for the purposes of 82.5°C sterilization and 45°C<br />
hand wash consumption, an initial 30°C thermal<br />
gain.<br />
By shifting 60% of its electricity generation<br />
requirements away from the brown coal based<br />
Victorian generation network, Midfield <strong>Meat</strong> was<br />
able to increase site energy efficiency from 40% to<br />
75% in 2009/2010 and reduce its site emissions<br />
profile by 5700t, CO 2 e on the previous year’s<br />
levels. To limit financial risk and future exposure to<br />
Operating & Maintenance expenses, Midfield <strong>Meat</strong><br />
entered into build own operate (BOO) contracts<br />
with both Osmoflo Pty Ltd, for the supply and<br />
operation of the reverse osmosis plant, and, SDA<br />
Engineering Pty Ltd for supply and operation of the<br />
CHP plant. Development of the geothermal bore<br />
and reverse osmosis system has proved fruitful for<br />
Midfield. At current operation the cost per kL of<br />
permeate produced has fluctuated from 10-30%<br />
less than the local water authority supply cost.<br />
With an expected increase of 30% still to come<br />
over the next two years, supply costs from the<br />
Midfield system will be 50% that of the local water<br />
authority.<br />
BEEF RIB CUTTING SYSTEM - STAGE 1 AT<br />
HAWKESBURY VALLEY AND JBS AUSTRALIA<br />
Currently the beef rib cutting operation at JBS<br />
Australia, Dinmore is performed manually by<br />
two operators per shift using industrial saws<br />
which are dangerous tools that expose operators<br />
to significant OH&S risks. The beef rib cutting<br />
task is arduous to all operators and due to the<br />
requirement of accuracy to maximise yield cannot<br />
be performed by an unskilled person. The robotic<br />
beef rib cutting system will involve an integration<br />
of sensing, robotics and conventional cutting tools<br />
to perform a pre boning cutting task to replace the<br />
actions of the manual saw operators and provide<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 53
an automated process providing the following<br />
features and benefits;<br />
• Labour reduction - 2 operators per working<br />
shift;<br />
• Line speed - 480 beef sides/hour;<br />
• OH&S - Elimination of dangerous operational<br />
practices;<br />
• Productivity - ensure improved cut surface finish<br />
compared to manual operations;<br />
• Processing efficiencies - accuracy of cuts<br />
reduce need for rework;<br />
• Yield gain - consistent accuracy of cuts will<br />
provide significant yield gain;<br />
• Food safety - reduced contamination compared<br />
to manual operations;<br />
• Reliability and accuracy, along with processing<br />
speed are critical to the success and<br />
acceptance of this technology.<br />
SEMI-AUTOMATED BEEF SCRIBING AT<br />
NORTHERN COOPERATIVE MEAT COMPANY<br />
Scribing of sides of beef is a task that is currently<br />
performed manually by operators utilising a hand<br />
held circular saw. This task is arduous and due to<br />
the accuracy required to maximise yield cannot be<br />
performed by and unskilled person.<br />
This project set out to utilise a vision system and a<br />
robot to implement a semi-automated scribe point<br />
location system. That is to have a camera take<br />
an image of a side and have an operator, seated<br />
at a computer terminal, identify the scribe point<br />
locations on the carcase using the PC terminal<br />
mouse to click on the start and end points for each<br />
scribe cut. Automating provides benefit in terms<br />
of labour reduction, suppression of OH&S claims<br />
related with the task, operational improvements,<br />
boning room efficiencies and Yield gains.<br />
The system has been successfully commissioned<br />
and is capable of processing approximately 340<br />
carcases a day. Further development is underway<br />
to provide improved vision and sensing capability<br />
as a platform for full automation and to increase<br />
throughput for higher volume production.<br />
WATER COLLECTION AND DATA ANALYSIS AT<br />
TEYS BROS<br />
Teys Bros commissioned a study to collect and<br />
collate information on water and waste flows in<br />
their Beenleigh meat processing facility and to<br />
estimate contaminant loads emitted by the plant.<br />
The aim of the project was to obtain sufficient<br />
information on waste stream flows and composition<br />
to feed into the development of a site strategy for<br />
improved efficiencies and sustainability. Specific<br />
objectives of the project were to estimate the flow<br />
and contaminant mass loads (kg/day) of major<br />
waste streams from the Beenleigh meat processing<br />
facility; to use the information to identify the most<br />
contaminant-rich (or “dirty”) waste streams; and to<br />
identify opportunities for source reduction in short,<br />
medium and long term.<br />
The study found that for each contaminant<br />
measured, three waste streams emit 50% or more<br />
of the total contaminant load. This is useful, since<br />
it permits these streams to be targeted for source<br />
reduction opportunities. The raw material bin<br />
drainage is a low flow (75 kL/day - or only 2.4% of<br />
total plant flow) stream but with very high strength.<br />
This stream was the worst contributor to nitrogen<br />
(32% of total), phosphorus (29%) and chloride<br />
(28%) and was a significant emitter of COD. This<br />
stream is the priority target for source reduction.<br />
The tripe processing effluent (370 kL/day or 12%<br />
of total flow) also contributed very high loads of oil<br />
& grease (almost 2/3rds of total plant emission)<br />
as well as significant COD, phosphorus (16%) and<br />
25% or more of salts. Cleaning flows were rich in<br />
COD and nutrients however, the concentration of<br />
these contaminants in the water is relatively low.<br />
Surprisingly the ante-mortem yards were not<br />
as significant contributor as typically seen in<br />
the industry. This may be due to difficulties in<br />
measuring this flow accurately. A large number<br />
of streams contribute negligible contaminant<br />
loads to the WWTP and can be largely ignored<br />
in finding significant efficiencies. These are<br />
identified in the report. The Boning Room flow is<br />
significant volume (5.5% of total flow) and only<br />
lightly contaminated. There is potential for this<br />
flow to either bypass treatment (thereby improving<br />
retention times), or to be reused in-plant as part of<br />
an appropriate application. This project provides a<br />
useful insight into water consumption and source<br />
of contaminants in the facility and this data will be<br />
useful for developing an effective strategy to drive<br />
further improvements in industry sustainability into<br />
the future.<br />
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RD&E Collaborations<br />
AMPC supports the concept and principals of<br />
cross sectoral collaboration underpinned by the<br />
Primary Industries Standing Committee and<br />
Primary Industry Ministerial Council National<br />
Research and Development Strategies and<br />
shares the Governments aspiration for effective<br />
collaboration and partnerships between<br />
sectoral RDC’s, Cooperative Research Centres<br />
(CRC), Government and other Research and<br />
Development organisations to deliver greater<br />
efficiency and better returns from the coinvestment<br />
of government R&D and industry<br />
funds. AMPC continues to seek opportunities<br />
for further RD&E collaboration and to partner<br />
with other primary industry Rural Research and<br />
Development <strong>Corporation</strong>s particularly where<br />
these investments deliver significant public<br />
good outcomes in key areas of shared resource<br />
sustainability, adapting to climate change and<br />
sustaining economic prosperity.<br />
THE EBCRC<br />
SMALL-MEDIUM SCALE STABILISATION OF<br />
ORGANIC SOLIDS<br />
The Temperature Phased Anaerobic Digestion<br />
(TPAD) biosolids project at the University of<br />
Queensland aims to provide a biochemical<br />
process to generate energy from the<br />
approximately 50T/d of paunch and other<br />
solid wastes that are produced from an average<br />
processor of 1000 head/d (50kg/head).<br />
This is generally disposed of by composting<br />
or landfilling. The alternative of anaerobic<br />
digestion has a moderate capital expense, but<br />
allows generation of up to 20% of the plant<br />
gas requirements directly from the waste, as<br />
well as production of a stabilised final product<br />
that is low risk for storage or use as an organic<br />
fertilizer.<br />
Fundamental research at the University was<br />
funded by Environmental Biotechnology<br />
CRC and the Queensland State (Smart State<br />
Scheme). This has been supported on the<br />
ground by $125,000 in funding from MLA and<br />
AMPC to support construction of a $500,000<br />
pilot plant at Teys Brothers in Beenleigh (partial<br />
funding from Qld State Govt). The pilot plant<br />
is capable of treating approximately 10% of<br />
the solid wastes being produced at Teys and<br />
is now providing all information to build at a<br />
variety of processor scales. In particular, recent<br />
implementation of a solids handling system,<br />
capable of feeding whole paunch has enhanced<br />
our capacity to assess high-solids feed levels,<br />
which can reduce risk and project payback.<br />
The pilot plant outcomes are now undergoing<br />
cost-benefit analysis for application to other<br />
processing sites, particularly those that are<br />
constrained by solids disposal.<br />
UPDate<br />
The pilot plant outcomes are now providing<br />
information to build at a variety of processor<br />
scales and these are undergoing cost-benefit<br />
analysis for application to other processing<br />
sites, particularly those that are constrained<br />
by solids disposal.<br />
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CSIRO CENTRE FOR WATER<br />
RECYCLING EXCELLENCE<br />
AMPC is collaborating with the CSIRO Divisions of<br />
Food and Nutritional Sciences, Land and Water,<br />
Material Science and Engineering and Ecosystem<br />
Sciences and the Water for Healthy Country and<br />
Sustainable Agriculture Flagship in a project to<br />
identify and enable water recycling opportunities<br />
in the agri-food industry through an integrated<br />
systems analysis, technology assessment and<br />
targeted research to address water recycling<br />
implementation barriers.<br />
Effort will focus on addressing current industry<br />
challenges, including regulatory/policy pressures,<br />
developing strategies to increase acceptance<br />
by consumers of water recycling and enhance<br />
the sustainability positioning with customers/<br />
consumers, economic/ higher value-proposition<br />
evaluation and applying new technologies /risk<br />
assessments to enable broader and increased<br />
implementation.<br />
In association with industry collaborators the<br />
project team will seek to demonstrate highervalue<br />
opportunities for water recycling that deliver<br />
economic, environmental and social benefits to the<br />
agri-food industry and community.<br />
Through this project AMPC will also collaborate<br />
with State government agencies in Queensland in<br />
both the demonstration and technology transfer<br />
portions of the project and key industry agencies<br />
with research and development management<br />
responsibilities for their sectors including <strong>Meat</strong><br />
and Livestock Australia (MLA), Dairy Innovation<br />
Australia Ltd (DIAL) and Dairy Australia (DA).<br />
Regulatory issues will be addressed by the project<br />
team through consultation with the <strong>Australian</strong><br />
Quarantine and Inspection Service (AQIS) and Food<br />
Standards Australia New Zealand (FSANZ).<br />
UPDate<br />
AMPC participation in this national collaborative<br />
project will focus on reviewing existing water<br />
recycling/reuse in the red meat processing sector<br />
to identify and account for key variables and<br />
include consideration of cost benefit analysis<br />
(CBA) for technologies, solutions and approaches<br />
to be employed.<br />
THE SHEEP CRC<br />
AMPC invests in the Transforming <strong>Meat</strong> program<br />
which aims to increase the rate of improvement of<br />
lean meat yield and meat quality through delivery<br />
of genetic and non-genetic tools. Improvement<br />
in meat quality will involve eating quality and<br />
nutritional value.<br />
Highlights of the investment with the Sheep CRC<br />
include:<br />
LEAN MEAT YIELD<br />
- BUSINESS VALUE ANALYSIS<br />
The business value analysis service is provided<br />
by the Sheep CRC in collaboration with partners<br />
to help lamb supply chains place an economic<br />
value on lean meat yield and so justify its in-plant<br />
measurement to:<br />
• Improve boning decisions;<br />
• Deliver enhanced feedback to producers<br />
including the concept of bonus systems for<br />
superior lean meat yielding carcases.<br />
The analysis involves a six day, business and<br />
processor plant consultancy (10 days including<br />
report generation) to explore the potential for<br />
enhanced and innovative communication, feedback<br />
and value based payment systems.<br />
Benefits:<br />
• Identification of the value of improving lean<br />
meat yield for a particular processing plant and<br />
lamb supply chain;<br />
• Assists with development of a Value Based<br />
Payment System.<br />
“Improving meat yield and measurement for<br />
value adding”<br />
LEAN MEAT YIELD - MEASUREMENT<br />
The Sheep CRC advises on the range of<br />
technologies for carcase measurement which are<br />
required for the calculation of lean meat yield,<br />
including GR probe; Eye muscle depth and C fat<br />
depth probe VIASCAN, GR depth or full lean meat<br />
yield prediction, Ultrasound, 2-D X-rays and CAT<br />
scanning.<br />
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Benefits:<br />
• Identification of appropriate in-plant lean meat<br />
yield measurement technologies;<br />
• The value of lean meat yield measurement and<br />
management is estimated to be $1 - $10 per<br />
carcase. This is specific to every supply chain<br />
and increases very significantly when the supply<br />
chain undertakes extensive fabrication and<br />
value adding.<br />
ELECTRICAL STIMULATION AUDIT<br />
A system audit for testing of in-plant electrical<br />
stimulation compliance has been developed by<br />
the Sheep CRC and included in the National <strong>Meat</strong><br />
Industry Training Advisory Council (MINTRAC)<br />
training for processor staff. The audit ensures<br />
electrical stimulation equipment is operating<br />
correctly to deliver pH x temperature compliance.<br />
It is hoped to include the outcomes in MSA Lamb<br />
procedures.<br />
The audit process is supported by the Practical<br />
Wisdom Notes on “Electrical stimulation for<br />
improved eating quality”.<br />
Benefits:<br />
• Effective operation of in-plant electrical<br />
stimulation equipment.<br />
UPDate<br />
AMPC looks forward to continuing work with<br />
the Sheep CRC and investigating options for the<br />
continuation of RD&E outcomes post CRC. Future<br />
directions under discussion on behalf of AMPC<br />
members include: developing and providing<br />
better information to AMPC members on CRC<br />
ouputs, establishing further projects that deliver<br />
supply chain links with processors and producers<br />
and establishing streamlined phenotypic<br />
measurements for the Information Nucleus<br />
Program and related trials.<br />
<strong>Australian</strong> Pork, MLA and the <strong>Australian</strong> Lot<br />
Feeders’ Association.<br />
Through the M2M program JBS Australia is being<br />
supported to establish a new covered anaerobic<br />
lagoon (CAL) demonstration site at King Island<br />
abattoir. This project seeks to implement a modern<br />
covered anaerobic lagoon (CAL) in an iconic<br />
<strong>Australian</strong> integrated meat processing facility<br />
owned and operated by the industry’s largest<br />
processor, Swift Australia Pty Ltd.<br />
A thorough monitoring program is proposed to<br />
capture useful information regarding CAL start-up<br />
behaviour and subsequent steady state operation.<br />
For this purpose the CAL will be extensively<br />
instrumented (biogas flow, methane analyser and<br />
wastewater flowmeter) for real time measurement<br />
of biogas production and to relate this to feed<br />
wastewater organic load through on-line flowmeter<br />
measurements and regular COD monitoring.<br />
UPDate<br />
Participation in M2M forms part of a broader<br />
AMPC strategy to address critical knowledge gaps<br />
with regard to the successful development of<br />
methane recovery and use projects for <strong>Australian</strong><br />
meat processing. Data from this project will be<br />
collated with similar monitoring and evaluation<br />
projects at three other meat processing CAL sites<br />
and contribute to the development of the AMPC<br />
Anaerobic Lagoon Knowledge Centre project.<br />
RIRDC METHANE TO MARKETS<br />
PROGRAM<br />
AMPC is partner to the Rural Industries Research<br />
and Development <strong>Corporation</strong> (RIRDC) Methane<br />
to Markets Program (M2M). Funded by the DAFF<br />
M2M is guided by a Steering Committee that<br />
includes AMPC, DAFF, RIRDC, Dairy Australia,<br />
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OTHER HIGHLIGHTS<br />
“ADVANCING THE FUTURE”<br />
- AMPC’S MEAT INDUSTRY<br />
CONFERENCE<br />
The “Advancing the Future – for <strong>Meat</strong><br />
Processing through Engineering, Research,<br />
Efficiency and Sustainability”, conference<br />
was a first for AMPC. This event provided an<br />
opportunity to showcase the latest research<br />
and development projects that AMPC invests<br />
in and to focus on future opportunities for the<br />
meat processing sector.<br />
Day 1 showcased information on the latest<br />
economic outlook for the processing industry;<br />
new and future developments on technology<br />
and automation, new approaches to<br />
managing and enhancing market access; and<br />
opportunities to add value to meat products.<br />
Case studies were presented by industry<br />
representatives, focussing on how meat<br />
processors have developed and implemented<br />
research outcomes to their advantage.<br />
Featured speakers included Jamie Penn from<br />
the <strong>Australian</strong> Bureau of Agricultural and<br />
Research Economics (ABARE), Clyde Campbell<br />
from Machinery Automation and Robotics,<br />
Laura Sexton from Scott Technology, and<br />
industry experts such as David McKinna from<br />
Global Consultancy, Alistair Watson from Coles<br />
Supermarkets and David Carew and Duncan<br />
Veal from MLA.<br />
Day 2 highlighted issues impacting the supply<br />
chain, climate change, energy, wastewater and<br />
solid waste management, product integrity,<br />
quality and meat science. Day 2 was opened<br />
by David Crombie and Michael O’Keefe. On day<br />
2, the audience were presented with the latest<br />
climate change scenarios impacting meat<br />
processors “Climate Change into the Future:<br />
the Scenarios, impacts and implementation”,<br />
new developments in Greenhouse Gas<br />
management, energy efficiency, optimisation<br />
and research underway on waste management<br />
and water efficiency. Day 2 also included<br />
processor case studies that highlighted<br />
industry adoption of technologies that<br />
enhanced business and industry sustainability<br />
and showcased the challenges facing individual<br />
businesses and their approach towards<br />
becoming ‘clean and green’.<br />
“A total of 138 attendees included 35<br />
processing businesses, 44 processor<br />
representatives, 30 RD&E organisations<br />
and 11 sponsor/exhibitors.”<br />
The meat science presentations included<br />
microbiology advancements “Advances with<br />
pathogenic eColi in red meat”, the latest on<br />
meat quality “Taste, Tenderness, Shelf Life<br />
and colour in Red <strong>Meat</strong> products”, biosecurity<br />
management and product integrity.<br />
Featured speakers included Michael O’Keeffe,<br />
O’Keeffe & Associates; David Crombie;<br />
Bernadette McCabe, University of Southern<br />
QLD; Damien Batstone, University of QLD;<br />
Lyndon Kurth, CSIRO; Peter McGilchrist,<br />
Murdoch University and Ian Denney, Animal<br />
Health Australia.<br />
UPDate<br />
AMPC is currently in discussions with AMPC<br />
members regarding opportunities to further<br />
expand and deliver on this program<br />
for the year <strong>2011</strong>-2012.<br />
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YOUNG GUNS<br />
The Young Guns program was established to<br />
provide personal and professional development<br />
to young people employed in the meat processing<br />
sector and is supported by AMPC. The program<br />
continues to attract young Queenslanders from<br />
processor groups, retail country butchers and<br />
registered training organizations. Young Gun<br />
members are acknowledged by their employers,<br />
trainers and families as the next generation of<br />
managers and owners of small country integrated<br />
meat businesses. Many participants come from<br />
remote locations throughout Queensland and are<br />
encouraged to learn additional skills and pursue<br />
opportunities for extra training.<br />
“Attracting new generation and capable<br />
people to the red meat processing industry.”<br />
The 7th Young Guns Training and Development<br />
Workshop <strong>2011</strong> was conducted in Warwick<br />
on the 6 and 7 May <strong>2011</strong>. Being the next<br />
generation of managers and owners from small<br />
country integrated meat businesses throughout<br />
Queensland, participants are encouraged to<br />
discuss and pursue extra skills and training. AMPC,<br />
MLA and AMIC collaboratively recognize and<br />
support the ongoing need to develop structured<br />
career paths for meat industry participants at every<br />
level.<br />
This year’s workshop had a variety of activities<br />
and guest speakers. Highlight events included the<br />
following:<br />
T & R Pastoral, Wallangarra Site Visit - 21 Young<br />
Guns were shown through the Wallangarra plant<br />
by staff, viewing the Paddock to Plate process,<br />
including packaging and shipment. Wallangarra<br />
process a range of grain and grass fed beef,<br />
lamb, mutton and goat, including Saudi approved<br />
products, Halal, red meats, specific trims and<br />
manufacturing meat, bone in and boneless<br />
products.<br />
Carey Bros, Warwick Site Visit - The Young Guns<br />
were shown the improvement/upgrades that<br />
the abattoir had undergone during the past 12<br />
months. Participants took part in a hands-on<br />
session in stunning/applying air knife techniques<br />
and general processing skills using air knives.<br />
Other presentations included micro testing,<br />
(reading results and validation), lamb purchasing<br />
and feedlot management, curing hides and skins,<br />
the National Livestock Identification System and<br />
selection and purchasing livestock.<br />
UPDate<br />
AMPC is currently discussing options with<br />
members to extend the Young Guns nationally.<br />
QUEENSLAND COUNTRY MEAT<br />
PROCESSORS ASSOCIATION<br />
The Queensland Country <strong>Meat</strong> <strong>Processor</strong>s<br />
Association (QCMPA) is a voluntary organisation<br />
of small integrated meat processing and retailing<br />
operations located in rural towns throughout<br />
Queensland. The Association was formed in<br />
October 1982 with the objective of advancing<br />
the interests of its rural-based members. It has<br />
operated continuously since its inception.<br />
AMPC, in collaboration with AMIC and MLA,<br />
supports events for the 43 members of the<br />
QCMPA. Each year workshops are held in May and<br />
November. Members from across the State are<br />
able to meet and discuss solutions to common<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 59
Photo by Steve Keough Photography<br />
problems and to enhance their technical knowledge<br />
of the meat processing and retailing industry. An<br />
integral part of the workshops are the inspection<br />
tours of meat processing facilities, research<br />
laboratories and state of the art retail premises.<br />
The tours provide members with innovative ideas to<br />
implement in their own businesses.<br />
QCMPA is active in ensuring that changes to meat<br />
processing and retailing legislation, food safety<br />
laws and associated regulations do not adversely<br />
impact on its members. It achieves this through<br />
active interface with Government Departments and<br />
Food Safety Regulators. The workshop held in May<br />
<strong>2011</strong> saw the QCMPA processors visit Melbourne.<br />
The visit included:<br />
• A tour of the facilities at Radford & Son<br />
Processing plant, highlight being the recycling<br />
and water plant;<br />
• A visit to Rainbow <strong>Meat</strong>s – one of Melbourne’s<br />
leading retail butchers;<br />
• A tour of Hardwicks’ processing plant and the<br />
Retail <strong>Meat</strong> Barn.<br />
The following issues were included on the agenda<br />
for information and discussion: ‘potential projects;<br />
an overview of the Technology and Environmental<br />
Programs <strong>2011</strong>-12 ; the Young Guns program for<br />
2012; the AQIS Reform; Carbon Trading and Small<br />
Business; Workers Compensation Calculations;<br />
MINTRAC suggested areas that QCMPA members<br />
may benefit from eg Workshops on animal welfare<br />
or similar skill set training’.<br />
UPDate<br />
AMPC continues to work with the QCMPA towards<br />
establishing RD&E and Marketing projects that<br />
address issues facing small-medium processors.<br />
A series of projects are currently being identified<br />
for delivery during <strong>2011</strong>-2012.<br />
A similar approach is taken with the NSW<br />
Domestic processors.<br />
AMPC INNOVation AWARDS<br />
AMPC supports and encourages members to<br />
submit applications to the OH&S Innovation Award<br />
and The Red <strong>Meat</strong> Processing Innovation Award.<br />
“<strong>Processor</strong> innovations provide extremely<br />
valuable contributions to R&D direction and<br />
output nationally”<br />
The OH&S Innovation Award held every two years<br />
and aims to showcase the creative and practical<br />
solutions being implemented by organisations to<br />
health and safety challenges across the industry.<br />
The 2010 OH&S Innovation Award winners were<br />
presented at the conference dinner on 21 October<br />
2010, as part of the 2010 National OH&S Red<br />
<strong>Meat</strong> Industry Conference held at the Radisson<br />
Resort, Gold Coast. The winner of the OH&S<br />
Innovation Award 2010 was Cargill Beef Australia<br />
with their submission “Bandsaw safety project” and<br />
the People’s Choice Award went to Midfield <strong>Meat</strong><br />
International for their submission “Robotic Ovine<br />
Cutter”.<br />
The Red <strong>Meat</strong> Processing Innovation Awards which<br />
aims to showcase organisations within the industry<br />
demonstrating original, creative problem solving<br />
initiatives to the challenges faced within the meat<br />
processing environment. The Award acknowledges<br />
one organisation above all, that demonstrates<br />
exceptional achievement in research, development<br />
and extension innovation. The Red <strong>Meat</strong> Processing<br />
Innovation Award were presented at the AMIC<br />
Conference dinner held on 25 August <strong>2011</strong>, Gold<br />
Coast. The Winner of the Red <strong>Meat</strong> Processing<br />
Innovation Awards <strong>2011</strong> was Nolan <strong>Meat</strong> Pty Ltd<br />
with their submission “Nolan <strong>Meat</strong>s Food Safety<br />
Reform”.<br />
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Entries submitted to both the OHS Innovation<br />
and Red <strong>Meat</strong> Processing Innovation Awards are<br />
judged by expert industry panels and assessed<br />
against defined R&D, capability and project related<br />
following criteria.<br />
ABARE <strong>2011</strong> SCIENCE AWARD<br />
AMPC have sponsored this prestigious award<br />
for three years, the winner for <strong>2011</strong> was Peter<br />
McGilchrist, Murdoch University with his project<br />
“The effect of animal temperament on muscle<br />
glycogen concentration, feedlot performance and<br />
the incidence of dark cutting syndrome in beef”<br />
was presented with his award by the Honourable<br />
Joe Ludwig, Minister for Agriculture, Fisheries and<br />
Forestry at the <strong>Australian</strong> Bureau of Agricultural<br />
and Resource Economics and Sciences (ABARES)<br />
Outlook conference in Canberra 1-2 March <strong>2011</strong>.<br />
The <strong>Australian</strong> Agricultural Industries Young Innovators<br />
and Scientists Awards support young people to pursue<br />
their innovative scientific ideas that will deliver long<br />
term benefits to Australia’s rural industries.<br />
The winners are selected from a competitive field<br />
throughout Australia. Each application is assessed<br />
against a range of criteria, including the level of<br />
innovation and originality of the proposal and the<br />
potential to generate long-term benefits to Australia’s<br />
rural industries.<br />
Peter attended and presented at the AMPC<br />
conference held in June <strong>2011</strong> and a “Fact Sheet”<br />
has been produced and circulated to members.<br />
AUSTRALIAN RURAL LEADERSHIP<br />
PROGRAM<br />
AMPC continues to invest in building human<br />
capacity and consider this a high priority for the<br />
meat processing sector and the broader red meat<br />
industry. Under its statutory funding agreement,<br />
AMPC seeks to devote appropriate investment<br />
towards post graduate training, capability building<br />
and leadership programs for developing industry<br />
participants and researchers.<br />
AMPC considers that the beneficiaries of these<br />
investments will not only help secure the ongoing<br />
R&D capacity of our industry, but also the<br />
leadership capacity of their industry-which in the<br />
end will be a major determinant of an industry’s<br />
willingness and ability to embrace and apply the<br />
innovation arising from investments in R&D.<br />
A key contributing program for AMPC in achieving<br />
this goal is the <strong>Australian</strong> Rural Leadership<br />
Program. The <strong>Australian</strong> Rural Leadership Program<br />
(ARLP) is designed for individuals who will lead<br />
rural, regional and remote Australia into the future.<br />
It offers a series of educational sessions during<br />
which participants develop leadership skills and<br />
increase their knowledge and understanding of the<br />
challenges and opportunities facing rural Australia<br />
and its primary industries through sharing<br />
experiences and exploring contemporary issues.<br />
AMPC has supported the program for nine years<br />
with eight of the participants remaining within the<br />
industry. Recipients who have attended the Course<br />
over the last nine years are:<br />
Jack Barclay, Peter Milzewski, Matt Wentzel,Andrew<br />
Westlake, Justin Gathercole, Farron Fletcher, Michael<br />
Swiney and currently Kim McDougal.<br />
UPDate<br />
Final selections by ARL are now being made for<br />
the next <strong>Australian</strong> Rural Leadership candidates,<br />
taking account of AMPC’s recommendations.<br />
AMPC received very comprehensive applications<br />
from members and looks forward to supporting<br />
the next round of successful candidates.<br />
“Developing leaders in industry and building<br />
capability to address future challenges”<br />
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AUSTRALIAN INTERCOLLEGIATE<br />
MEAT JUDGING ASSOCIATION<br />
AMPC has been a major sponsor of Intercollegiate<br />
<strong>Meat</strong> Judging (ICMJ) program since 2004, a<br />
not-for-profit association aimed at exposing and<br />
encouraging students into careers in the meat<br />
industry. ICMJ runs two competitions each year:<br />
a schools competition held in Tamworth; and a<br />
university competition and training course held in<br />
Armidale.<br />
The objective of the Intercollegiate <strong>Meat</strong> Judging<br />
Competition is to provide an opportunity for<br />
students to learn and to build the pool of<br />
intelligent young meat industry representatives who<br />
will give the <strong>Australian</strong> meat industry the expertise<br />
and drive to compete in the meat quality world of<br />
the future.<br />
The US has various contests each year and<br />
students travel all over the US competing.<br />
Nowadays many of the top managers in the US<br />
meat industry are former contestants.<br />
<strong>2011</strong> saw the 22nd Intercollegiate <strong>Meat</strong> Judging<br />
Industry workshop and competition (ICMJ) was<br />
held in Armidale, NSW from the 5–9 July <strong>2011</strong>.<br />
The program was conducted over 5 evenings and 4<br />
days and included industry presentations, practical<br />
meat training workshops, a Careers Expo and<br />
concluded with a meat judging competition. Over<br />
94 students attended the program and represented<br />
12 universities giving up time out of their holidays<br />
to learn more about the <strong>Australian</strong> <strong>Meat</strong> &<br />
Livestock industry. Whist the feature event is the<br />
Armidale workshop; there are also two schools<br />
contests (Gympie and Scone), the Brisbane training<br />
week and the USA industry tour.<br />
Two visiting international teams from the USA<br />
and Japan add an additional dimension to the<br />
program. A number of high calibre, influential and<br />
inspirational speakers were assembled adding a<br />
lot of profile to the event and providing a highly<br />
commercial and professional overview of the<br />
industry.<br />
After students had competed in 13 judging classes<br />
over 2 days of competition, prize winners were<br />
recognized and awarded at the Presentation dinner.<br />
Major prize winners were as follows<br />
This is done through:<br />
• Exposing students to the fundamentals of<br />
meat quality education, meat identification and<br />
classification and enabling opportunity to apply<br />
knowledge of practical aspects of meat science;<br />
• Demonstrating to students how and why<br />
markets perceive meat quality differently and<br />
highlighting the various carcase specifications<br />
required by these markets;<br />
• Raising students’ awareness of career<br />
opportunities that exist in the meat industry;<br />
• Exposing students to the requirements of<br />
the end-user (consumer), new technologies<br />
within the meat industry, training and a<br />
non-threatening competitive environment<br />
to assist students develop confidence and<br />
communication skills.<br />
Champion Individual (Cargill buckle):<br />
Jerra McMath, Texas Tech University<br />
Champion Team:<br />
Texas Tech University, USA<br />
<strong>2011</strong> Finalists<br />
10 students were selected to participate in the<br />
Brisbane training week that will take place later in<br />
the year to coincide with University holidays.<br />
This training will include industry presentations,<br />
MSA training and visits to abattoirs and other Red<br />
<strong>Meat</strong> industry businesses. MSA and USDA grading<br />
presentations will also occur.<br />
At the conclusion of this training, after an interview<br />
process the top 5 students will be selected to<br />
participate in a 3 week industry tour of the<br />
US, including representing Australia in the US<br />
competition in January 2012.<br />
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The <strong>2011</strong> ICMJ workshop and competition was<br />
a great success. The program exposed students<br />
to industry representatives and educated them<br />
on opportunities in the Red <strong>Meat</strong> Sector. A small<br />
number of students will gain further development<br />
and industry investment as they move through<br />
training and selection for the trip to the USA.<br />
THE INTERNATIONAL MEAT<br />
autoMATION CONFERENCE<br />
auSTRALIA (IMACA)<br />
The iMACA conference provided a tremendous<br />
opportunity for industry and technical experts from<br />
around the world to interact and present the latest<br />
in automation research and development. Key<br />
highlights of the conference included the following<br />
topics:<br />
• Objective Carcass & Process Measurement and<br />
Analysis will be the industry driver of future<br />
sustainable improvement in productivity and<br />
profitability;<br />
• Several automation projects have now reached<br />
the stage of commercial viability;<br />
• Automation needs to be very cost effective, not<br />
more complex than it absolutely needs to be,<br />
and to be developed promptly;<br />
• International competitiveness requires renewed<br />
efforts on productivity improvement (at least<br />
2% per annum);<br />
• The industry has a number of committed<br />
experienced equipment & service providers, and<br />
industry organisations, to assist processors to<br />
make the right investment decisions.<br />
“Showcasing new technologies under<br />
development on the international scene”<br />
Specific highlights included:<br />
Peter Bradbury, ABB, Australia introduced the<br />
development of automation in picking, packaging<br />
and palletising system and identified the value<br />
robotics can provide in areas where people may<br />
be less efficient or able to be retained easily.<br />
Shane Wittman, Midfield, Australia provided us with<br />
a practical example of the Robotic Ovine Cutter<br />
(ROC) system and highlighted how the plant and<br />
technology providers managed issues associated<br />
with carcass size, gripping and cut accuracy. Sean<br />
Starling, Scott Technology, Australia presented their<br />
vision for a fully automated boning room and the<br />
advances made to date. Brynjolfur Thorsson, Marel,<br />
Iceland provided an extensive presentation on the<br />
Marel boning hall solutions and the data capture<br />
processes accompanying the technology. Koorosh<br />
Khodabandehloo demonstrated that with the<br />
benefit of 20 years meat industry hindsight that<br />
automation, and its’ consequent efficiency gains,<br />
new technologies are now coming in, if not already<br />
now available.<br />
THE 2010 NATIONAL RED MEAT<br />
INDUSTRY OH&S CONFERENCE<br />
The 2010 National Red <strong>Meat</strong> Industry OH&S<br />
Conference was held October 21-22 at the<br />
Radisson Resort on the Gold Coast. The conference<br />
focused on the theme “Building a safer workplace<br />
together” and key note speakers included<br />
Woolworths, Specialist workers compensation<br />
investigators, and a range of industry and<br />
Government experts.<br />
Topics covered included bullying and violence,<br />
fatigue management, the latest developments<br />
in personal protective equipment, worker’s<br />
compensation fraud and updates on manual<br />
assisted technologies to name a few. Attendees<br />
included OH&S supervisors, human resource<br />
personnel, workers compensation representatives,<br />
training personnel, plant managers and<br />
Government and technical representatives.<br />
UPDate<br />
Further information and all conference<br />
presentations go to the following weblink:<br />
www.redmeatinnovation.com.au.<br />
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directors report<br />
The Directors present their report together with the financial report of the AMPC for the year ended<br />
30 June <strong>2011</strong> and auditor’s report thereon. This financial report has been prepared in accordance with<br />
<strong>Australian</strong> Equivalents of International Financial Reporting Standards.<br />
The Directors of the Company in office at the date of this report (or holding office during the year) are:<br />
G Hardwick – Chairman<br />
Gary Hardwick is Principal of Hardwick’s <strong>Meat</strong>works Pty Ltd located in Kyneton, Victoria.<br />
Gary is a qualified Accountant, a Member of the <strong>Australian</strong> <strong>Processor</strong>s Council (APC) and<br />
Director and Board Member of <strong>Australian</strong> <strong>Meat</strong> Industry Superannuation Trust.<br />
Gary was elected to the AMPC Board for a sixth term in March 2010 and elected Chairman in<br />
April 2010.<br />
S J Kelly – Deputy Chairman<br />
Stephen Kelly is currently a Director of Nippon <strong>Meat</strong> Packers Australia Pty Ltd (NMPA)<br />
and General Manager – Sales & Marketing for the group. NMPA own and operate three<br />
beef processing plants in Australia, Oakey Abattoir, Thomas Borthwick & Sons Mackay<br />
and Wingham Beef Exports, a Wet Blue Tannery in Toowoomba and Whyalla Feedlot in<br />
Texas, QLD. Stephen sits on the AMIC National Export Beef Council and the <strong>Australian</strong><br />
<strong>Processor</strong> Council and is a Director of AUS-MEAT Ltd.<br />
Stephen was elected to the AMPC Board for a second term in March 2010 and elected Deputy<br />
Chairman in April 2010<br />
J K Berry – Director<br />
John Berry a Director of JBS Australia Pty Limited and has been involved in the<br />
<strong>Australian</strong> <strong>Meat</strong> Industry for 16 years. John possesses a Bachelor of Business and Master<br />
of Business Administration.<br />
John was elected to the AMPC Board for a second term in March 2010.<br />
G F Burridge – Director<br />
Gary Burridge is the Chief Executive Officer of the Northern Co-operative <strong>Meat</strong> Company<br />
Ltd (Casino NSW) a dedicated export beef and veal processing facility, which also<br />
operates an export wet blue tannery at Casino and a pig processing plant at Booyong.<br />
Gary is a qualified Engineer and is currently Chairman of the AMIC – NSW, Chairman of<br />
the <strong>Australian</strong> Processing Council, Chairman of the National Export Beef Council and sits<br />
on a number of <strong>Australian</strong> Red <strong>Meat</strong> Industry Committees.<br />
Gary was elected to the AMPC Board for a second term in March 2010.<br />
B J Carey – Director<br />
Brian Carey is the founder of Food Processing Equipment (FPE). FPE supplies processing<br />
equipment to the abattoir industry Australia wide. FPE has a fully functional office in New<br />
Zealand with its office in Hamilton. The Carey family also has a major interest in a service<br />
abattoir in the north of South Australia who specialise in contract kill.<br />
Brian was elected to the AMPC Board as a Special Qualifications Director in March 2010.<br />
64<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
M J M Jackson – Director<br />
Mike Jackson, CEO of Harvey Beef in WA, having previously held a similar position in a<br />
Queensland beef processing and lot-feeding operation for several years. Harvey Beef is the<br />
largest beef processor in the West and is the main exporter of high quality beef from the<br />
state. Since qualifying as a Chartered Accountant, he has had 30 years senior executive<br />
experience in a wide range of industries, particularly food processing and beef.<br />
Mike having previously served on the AMPC Board in 2003-05 was re-elected in March 2010.<br />
R B James – Director<br />
Brian James is currently a Director of and is actively involved in T&R Pastoral Pty Ltd<br />
which owns and operates fully integrated export processing establishments at Murray<br />
Bridge (SA), Lobethal (SA), Tamworth (NSW) and Wallangarra (QLD). Brian is involved in<br />
numerous Committees including AMPC and AMIC. Among other qualifications Brian is an<br />
Associate of the <strong>Australian</strong> Society of Accountants.<br />
Brian was elected to the AMPC Board for a fourth term in March 2010.<br />
T Maguire – Director<br />
Tom Maguire currently holds the position of General Manager- Corporate Affairs and<br />
Innovations with Teys Bros (Holdings) Pty Limited. Tom has been involved in the <strong>Australian</strong><br />
<strong>Meat</strong> Industry since 1997 and has held senior positions in the AMIC and National <strong>Meat</strong><br />
Association of Australia. Tom is also a Member of AMIC’s National Export Beef Council<br />
and <strong>Australian</strong> <strong>Processor</strong> Council. Tom holds post graduate qualifications in Economics,<br />
Industrial Relations and Human Resource Management.<br />
Tom was elected to the AMPC Board for a second term in March 2010.<br />
P G Noble – Director<br />
Peter Noble is a Director of family Company GM Scott Pty Ltd and he has been involved<br />
in the meat industry most of his life. He is a lawyer and has practiced with International<br />
law firms in Asia, Australia and the United States. He is presently the Head of Corporate<br />
Governance for a major Life Insurance Company. Peter has degrees in law and commerce<br />
from the University of NSW. He is also an adjunct Associate Professor in Risk Management<br />
at the University of New England.<br />
Peter was elected to the AMPC Board as a Special Qualifications Director in March 2010.<br />
R Fletcher – Alternate Director<br />
Roger Fletcher is the Managing Director of Fletcher International Exports Pty Limited<br />
(Dubbo Abattoirs) New South Wales and Fletcher International (WA) Pty Limited (Narrikup<br />
Abattoirs) Western Australia. He is Chairman of the National and NSW State Export Lamb,<br />
Sheep & Goat Industries Council, Deputy Chairman of the <strong>Australian</strong> Wool Industry and a<br />
Board Member of the Infrastructure New South Wales.<br />
Directors have been in office since the start of the year to the date of this report unless<br />
otherwise stated.<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 65
DIRECTORS’ REPORT<br />
RESULTS<br />
The surplus of the Company for the year was<br />
$5,491,623 (2010: $2,149,026 surplus).<br />
SHORT AND LONG TERM OBJECTIVES<br />
The objectives for which the Company is established are:<br />
• To promote, protect and further the interests of the<br />
Company and its Members in any lawful manner;<br />
• To act as an Industry Services Body as declared<br />
by the Minister for Primary Industries by providing<br />
services, procuring and providing leadership relating<br />
to R&D and Marketing in the meat processing<br />
industry for the benefit of its Members, other meat<br />
processors and the community in general;<br />
• Where a Statutory Levy regime applies, enter<br />
into a Deed of Agreement or suchlike with the<br />
Commonwealth of Australia relating to the payment<br />
to and application of funds by the Company;<br />
• To collect payments or Company contributions from<br />
meat processors for the purpose of investing in<br />
and financing projects, undertakings or enterprises<br />
of any kind either severally or jointly with any<br />
meat industry corporation, body or entity; R&D<br />
corporation, body or entity; marketing corporation,<br />
body or entity; or other person body or entity; in the<br />
interests of and for the benefit of meat processors<br />
and/or the meat processing industry;<br />
• To enter into contracts with, employ and engage<br />
individuals, organisations, companies, bodies or<br />
entities to manage, R&D and Marketing projects<br />
and/or other projects on behalf of the Members<br />
and in the interests of and for the benefit of meat<br />
processors and/or the meat processing industry;<br />
• To perform such acts and do any other thing<br />
deemed necessary or desirable for the preservation,<br />
protection and promotion of the rights and interests<br />
of the Members as meat processors.<br />
AMPC is responsible to promote:<br />
• Freedom of trade in the interests of the Members;<br />
• Marketing and sales of <strong>Australian</strong> meat on the<br />
domestic market and to overseas countries;<br />
• <strong>Meat</strong> processing industry R&D including;<br />
• Improvement of the quality of <strong>Australian</strong> meat;<br />
• Classification of <strong>Australian</strong> meat;<br />
• The economic, environmental, health & safety and<br />
social wellbeing of the meat processing industry and<br />
the wider community;<br />
• The mutual interests of Members by holding<br />
conferences, symposiums and seminars for any<br />
or all of the Members and presenting the views<br />
of the Company on behalf of the Members at any<br />
conference, symposium or other forum; and<br />
• The interest of, do all relevant acts and things for<br />
the advancement, protection and promotion of the<br />
interests of the Members.<br />
To achieve these objectives, AMPC consults with its<br />
Members, the Commonwealth Government and industry<br />
stakeholders and develops, implements and maintains<br />
a 3 to 5 year Strategic Plan. AMPC regularly reviews<br />
its Strategic Plan in accordance with the requirements<br />
set out in the Statutory Funding Agreement with the<br />
Commonwealth Government.<br />
PRINCIPAL ACTIVITIES<br />
The principal activity of the Company involves the<br />
representation of red meat processors, in partnership<br />
with Government, and developing and delivering<br />
strategic R&D investments that are aimed at benefiting<br />
industry and the broader community.<br />
AMPC’s principle activities are to maximise the<br />
efficiency, viability and sustainability of the red meat<br />
processing industry by supporting the development of<br />
sound, scientific solutions that will:<br />
• Improve the long term efficiency and competitiveness<br />
of the industry;<br />
• Enhance the sustainability of the industry;<br />
• Improve the long term efficiency and competitiveness<br />
of the industry;<br />
• Assist to protect, secure and maintain market<br />
access;<br />
• Enhance capability and;<br />
• Enhance the overall productivity and performance of<br />
the meat processing sector.<br />
AMPC engages in extensive consultation with<br />
internal and external key stakeholders to develop<br />
an understanding of the challenges, drivers and<br />
opportunities in the meat processing environment<br />
that affect companies, the broader industry and the<br />
66<br />
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DIRECTORS’ REPORT<br />
community. This consultation enables AMPC to establish<br />
its strategic imperatives and priorities by which to direct<br />
R&D and Marketing investment. The Company’s Annual<br />
Operating Plan (AOP) sets out Marketing and R&D<br />
activities, expenditure against these activities and key<br />
performance indicators for both projects and programs<br />
administered each year.<br />
AMPC supports and invests in projects in a wide range<br />
of areas, including meat science, automation and<br />
technology, environment and sustainability, animal<br />
health, welfare and biosecurity, traceability and market<br />
access. Specifically, AMPC focusses on:<br />
• Promoting the <strong>Australian</strong> meat in the domestic and<br />
international marketplace;<br />
• Developing R&D initiatives that address issues in<br />
meat safety, quality and product integrity, capability,<br />
environment, livestock management and other<br />
elements of the supply chain;<br />
• Establishing projects and capability that assist in<br />
protecting the economic, environmental, health,<br />
safety and social wellbeing of the meat processing<br />
industry.<br />
INCORPORATION<br />
The Company was incorporated as a national Member<br />
funded public Company on 22 April 1998 pursuant to<br />
reforms announced by the Minister for the Department<br />
of Agriculture, Forestry and Fisheries on 18 March<br />
1997.<br />
These reforms required red meat processors and<br />
livestock exporters to establish separate self-funded<br />
companies to interact with a producer Company through<br />
willing partnership arrangements.<br />
In 2007, AMPC through its processor Peak Industry<br />
Council requested the Commonwealth Government to<br />
re-introduce a Statutory levy and that such funds be<br />
directed to AMPC to enable it to continue to carry on<br />
its normal business activities including its contractual<br />
arrangements pursuant to the Memorandum of<br />
Understanding referred to below. On 1 September 2007,<br />
the Government introduced a Statutory levy scheme<br />
to collect funds from red meat processors in turn<br />
forwarded these funds on to AMPC to manage and fund<br />
industry programs.<br />
MEMORANDUM OF UNDERSTANDING<br />
The Company became a party to the Memorandum<br />
of Understanding (MOU) on 27 April 1998 and to<br />
subsequent revisions to the original document.<br />
The MOU links the Company with MLA (a separate<br />
producer corporation) and LiveCorp (a separate<br />
livestock exporter’s corporation) together with the<br />
Commonwealth of Australia, Peak Industry Councils and<br />
the Red <strong>Meat</strong> Advisory Council.<br />
The roles and responsibilities of the Company under the<br />
MOU are:<br />
a) To provide management, funding and administrative<br />
arrangements for red meat processing industry<br />
activities to be undertaken by or through MLA<br />
including ‘Joint Functions’, ‘Core Functions’ and any<br />
unforeseen event which has significant impact upon<br />
the industry;<br />
b) In consultation with the AMIC to undertake activities<br />
and provide services on behalf of the processing<br />
sector of the industry which are not inconsistent with<br />
the provisions and principles of the MOU;<br />
c) Where services are provided by or through MLA,<br />
to develop jointly with MLA and/or AMIC goals for<br />
achieving the vision and strategic imperatives for the<br />
industry sector it represents;<br />
d) Each year to prepare in consultation with AMIC:<br />
I. A strategic plan including financial projections for<br />
the period of 3 years beginning on 1 July in that<br />
year for the performance of functions necessary<br />
to achieve the objects of the Company and<br />
consistent with the <strong>Meat</strong> Industry Strategic Plan<br />
(MISP); and<br />
II. An operating plan including financial projections<br />
setting out the activities the Company proposes<br />
to undertake in the immediately following<br />
financial year consistent with its business plan;<br />
e) To pursue the achievement of industry goals<br />
identified in the MISP in a manner consistent<br />
with policies and strategic imperatives developed<br />
pursuant to the MOU and to perform its functions<br />
and exercise its powers in a manner consistent<br />
therewith;<br />
f) To negotiate and enter into contracts with MLA, and<br />
with both MLA and LiveCorp, under which MLA will<br />
perform, or arrange for other persons to perform<br />
‘Joint Functions’ and services on behalf of the<br />
industry sectors they represent for achieving the<br />
goals identified in MISP.<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 67
DIRECTORS’ REPORT<br />
MEETING OF DIRECTORS<br />
The following table sets out the number of scheduled<br />
and urgent unscheduled Directors’ meetings (including<br />
meeting of Committees of Directors) held during the<br />
financial year and the number of meetings attended by<br />
each Director (while they were a Director or Committee<br />
Member). During the financial year, 6 Board meetings<br />
and 6 Audit & Risk Committee meetings were held.<br />
Directors<br />
Director’s<br />
Meetings<br />
Number<br />
eligible to<br />
attend<br />
Number<br />
attended<br />
aUDIT and risk<br />
committee<br />
Number<br />
eligible to<br />
attend<br />
Number<br />
attended<br />
G Hardwick 6 6 - -<br />
S Kelly 6 6 - -<br />
J Berry 6 6 6 3<br />
G Burridge 6 5 - -<br />
B Carey 6 6 5 5<br />
M Jackson 6 6 - -<br />
R B James 6 5 6 5<br />
T Maguire 6 6 - -<br />
P Noble 6 5 6 6<br />
B Carey (A&R Member from August 2010)<br />
AUDITOR’S INDEPENDENCE<br />
DECLARATION<br />
A copy of the auditor’s declaration under section 307C<br />
of the <strong>Corporation</strong>s Act in relation to the audit for the<br />
financial year is provided with this report.<br />
Signed in accordance with a resolution of the Board of<br />
Directors:<br />
Director, G Hardwick (Chairman)<br />
Director, S Kelly (Deputy Chairman)<br />
Dated this 19th day of October <strong>2011</strong><br />
CORPORATE GOVERNANCE<br />
STATEMENT<br />
The Board of AMPC is responsible with management,<br />
for the corporate governance practices of the Company<br />
and constantly updates its practices based on both its<br />
advice and its own investigations. This statement sets<br />
out the main corporate governance practices that were<br />
in operation throughout the financial year except where<br />
otherwise indicated.<br />
The Constitution of the Company was approved by the<br />
Members of the Company at a General Meeting held on<br />
14th June 2007 with a high level of support. In part, this<br />
was to address the proposed implementation of Statutory<br />
Levies, which commenced on 1 September 2007.<br />
BOARD OBJECTIVES<br />
The Board carries out its responsibilities according to<br />
the following mandate:<br />
• The Members elect the <strong>Processor</strong> Directors every two<br />
years;<br />
• The Special Qualifications Directors are elected by<br />
the processor Members of the Board;<br />
• The Chairman and Deputy Chairman are elected by<br />
the Board;<br />
• The Directors should possess a broad range of skills,<br />
qualifications and experience;<br />
• The Directors are expected to act independently of<br />
any associate activities that may cause a conflict;<br />
• The Board should meet on a regular basis, and<br />
• All available information in connection with items to<br />
be discussed at a meeting of the Board is provided<br />
to each Director prior to that meeting.<br />
As at the date of this Directors’ report, the Board<br />
consisted of seven <strong>Processor</strong> Directors and two Special<br />
Qualifications Directors. Details of the Directors are set<br />
out in the Directors’ report.<br />
The primary responsibilities of the Board include:<br />
• The approval of the Annual Operating Plan and the<br />
annual financial report;<br />
• The establishment of the long term goals of the<br />
Company and Strategic Plan to achieve those goals;<br />
• The review and adoption of annual budgets for<br />
the financial performance of the Company and<br />
monitoring the results on a regular basis;<br />
• Ensuring that the Company has implemented<br />
adequate systems of internal controls together with<br />
appropriate monitoring of compliance activities,<br />
68<br />
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CORPORATE GOVERNANCE STATEMENT<br />
including compliance with the Company’s obligations<br />
under the Red <strong>Meat</strong> Industry Memorandum of<br />
Understanding and Statutory Funding Agreement,<br />
and<br />
• Reporting to Government and the Members.<br />
INDEPENDENT PROFESSIONAL ADVICE<br />
With the prior approval of the Chairman, each<br />
Director has the right to seek independent legal and<br />
other professional advice at the Company’s expense<br />
concerning any aspect of the Company’s operations<br />
or undertakings in order to fulfil their duties and<br />
responsibilities as Directors.<br />
AUDIT & RISK COMMITTEE<br />
The Board of Directors has appointed an Audit and Risk<br />
Committee which consists of four Directors.<br />
The current Members of the Committee are:<br />
• Peter Noble (Chairman)<br />
• John Berry<br />
• Brian Carey<br />
• Brian James<br />
The Audit & Risk Committee meet on at least three<br />
occasions in the course of each year.<br />
The Audit and Risk Committee oversight responsibilities<br />
include:<br />
• The preparation and integrity of AMPC’s financial<br />
accounts and statements;<br />
• The internal controls, policies and procedures that<br />
AMPC uses to identify and manage business risks;<br />
• The qualifications, independence, engagement, fees<br />
and performance of AMPC’s external auditor;<br />
• The external auditor’s annual audit of AMPC’s<br />
financial statements;<br />
• The resources, performance and scope of AMPC’s<br />
internal audit function;<br />
• AMPC’s compliance with legal and regulatory<br />
requirements and compliance policies; and<br />
• Reviewing and recommending the annual budget to<br />
the Board.<br />
The Audit & Risk Committee invites the Chief Executive<br />
Officer and Financial & Accounting Manager and<br />
may request the external and internal auditors or the<br />
Company’s legal representatives to attend meetings for the<br />
purposes of considering pertinent matters that may arise.<br />
RISK MANAGEMENT<br />
The Board is responsible for the Company’s system of<br />
internal controls. The Board constantly monitors the<br />
operational and financial aspects of the Company’s<br />
activities and through the Audit & Risk Committee<br />
the Board considers the recommendations and advice<br />
of external and internal auditors and other external<br />
advisers on the operational and financial risks that arise<br />
or may arise.<br />
The Board ensures that recommendations and any<br />
concerns identified by the external and internal auditors<br />
and other external advisers are investigated and where<br />
considered necessary, appropriate action is taken.<br />
In addition, the Board investigates ways of enhancing<br />
existing risk management strategies, including<br />
appropriate segregation of duties, the employment and<br />
training of suitably qualified and experienced personnel,<br />
and, in conjunction with the recommendations of the<br />
Audit & Risk Committee, the scope and work program<br />
of internal auditors.<br />
The Board’s Audit Committee oversees preparation and<br />
implementation of the Company’s risk management<br />
initiatives.<br />
FRAUD CONTROL<br />
The Company’s 2009–11 Fraud Control Plan is reviewed<br />
annually by the Audit Committee and Board. During<br />
2009–10, the Company conducted a formal risk<br />
assessment. The process identified potential areas of<br />
risk facing the Company in relation to fraud. The Board<br />
are satisfied that:<br />
• A fraud risk assessment and fraud control<br />
plan has been prepared in compliance with the<br />
Commonwealth’s Fraud Control Guidelines as set out<br />
in the Company’s Fraud Control Plan 2009–11;<br />
• Appropriate fraud prevention, detection, investigation<br />
and reporting procedures and processes are in place<br />
as specified in the Company’s Fraud Control Plan<br />
2009–11;<br />
• Annual fraud data has been collected and reported in<br />
compliance with the Commonwealth’s Fraud Control<br />
Guidelines.<br />
Accordingly, the Board is satisfied that the Company’s<br />
fraud control policies, procedures and initiatives are in<br />
accordance with the Commonwealth’s Fraud Control<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 69
CORPORATE GOVernanCE StateMENT<br />
Guidelines. The Board’s Audit Committee oversees<br />
preparation and implementation of the Company’s fraud<br />
control policy.<br />
The Company’s 2009–12 Risk Management Plan is<br />
reviewed annually by the Audit Committee and Board<br />
to ensure all risks are reviewed where there have<br />
been changes in our internal or external operating<br />
environments and to consider any emerging risks.<br />
The control framework comprises a risk assessment<br />
methodology and a risk register with relevant mitigation<br />
strategies. In 2010-11, the Company continued<br />
conducting its formal risk assessment. The process<br />
identified material risks facing the Company at both<br />
strategic and operational levels using best practice<br />
methodology. The risk register was revised to address<br />
the significant risks raised during the risk assessment<br />
process.<br />
REMUNERATION REVIEWS<br />
The Board acts as a Remuneration Committee and<br />
reviews the remuneration policies applicable to all<br />
Directors and executive officers on an annual basis with<br />
respect to remuneration and terms of employment.<br />
Executive remuneration packages, which consist of base<br />
salary, fringe benefits, superannuation, and entitlements<br />
upon retirement or termination, are reviewed with due<br />
regard to performance and other relevant factors.<br />
In order to retain and attract executives of sufficient<br />
calibre to facilitate the efficient and effective<br />
management of the Company’s operations, the Board<br />
may seek the advice of external advisers in connection<br />
with the structure of remuneration packages.<br />
• Relations with customer & suppliers;<br />
• Employment practices; and<br />
• Responsibilities to the environment and the<br />
community.<br />
All Directors are required to declare any conflict of<br />
interest, perceived or otherwise, they may have in<br />
matters before the Board, not to vote or participate<br />
in the debate on matters in which they have a conflict<br />
and, where appropriate, to absent themselves from the<br />
meeting during the discussion and vote on that issue.<br />
A Director who has a direct personal interest in a matter<br />
that is being considered by the Board must disclose<br />
the nature of the interest at a meeting of the Board.<br />
The Board manages the potential for conflict of interest<br />
for Directors and senior management by an annual<br />
declaration of potential conflicts and by a standing<br />
agenda item at each Board meeting that requires<br />
Directors who may have a conflict of interest in any<br />
matter to be discussed at that meeting to identify the<br />
potential conflict. Where a material potential conflict<br />
is identified the Director leaves the meeting during<br />
discussion of the matter.<br />
Potential conflicts are recorded in the Board minutes<br />
and are available for consideration by the Company’s<br />
Auditors. Members of the Audit Committee also provide<br />
an annual written declaration to the Board stating they<br />
do not have any conflicts of interest that would preclude<br />
them from being members of the committee.<br />
CODE OF CONDUCT<br />
As part of the Board’s commitment to the highest<br />
standard of conduct, the Company has a code<br />
of conduct to guide executives, management<br />
and employees in carrying out their duties and<br />
responsibilities. The code of conduct includes such<br />
matters as:<br />
• Integrity of staff and Directors;<br />
• Information and operational transparency;<br />
• Responsibilities to Members;<br />
• Compliance with laws and regulations;<br />
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AUDITORS INDEPENDENCE DECLARATION<br />
to the members of australian meat processor corporation ltd<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 71
AMPC Key financial data<br />
xxxxxxxxxxxxxxxxxx<br />
Project expenditure Budget ($m) Actual ($m)<br />
FY 2008 15.20 11.27<br />
FY 2009 15.20 14.09<br />
FY 2010 15.72 14.17<br />
FY <strong>2011</strong> 14.90 10.98<br />
FY 2012 est 15.69<br />
$m Project ExPenditures<br />
AMPC Reserves<br />
AMPC Pre-Statutory R&D Marketing Total<br />
Reserves ($m) ($m) ($m) ($m)<br />
FY 2009 7.54 7.47 0.43 15.44<br />
FY 2010 4.86 12.73 0.00 17.59<br />
FY <strong>2011</strong> 3.89 19.19 0.00 23.08<br />
Marketing<br />
R&D<br />
Pre-Statutory<br />
Income - Contributions & Levy * $m<br />
FY 2008 14.99<br />
FY 2009 17.86<br />
FY 2010 16.61<br />
FY <strong>2011</strong> 16.71<br />
FY 2012 est 16.75<br />
*Statutory Levy commenced 1 September 2007<br />
s<br />
s<br />
s<br />
Statutory Levy by State ($m) 2009 ($m) 2010 ($m) <strong>2011</strong> Movement<br />
Queensland 6.77 6.02 5.79 -1.9%<br />
Victoria 4.45 3.73 4.17 s 2.3%<br />
New South Wales 4.37 3.82 3.76 -0.7%<br />
South Australia 1.37 1.29 1.27 -0.2%<br />
Western Australia 1.17 1.20 1.26 s 0.2%<br />
Tasmania 0.40 0.38 0.45 s 0.4%<br />
Statutory Levy by Species FY <strong>2011</strong> Statutory Levy by STATE FY <strong>2011</strong><br />
Cattle 76% Cattle 76%<br />
Sheep 5%<br />
Lamb 18%<br />
Cattle 76% Cattle 76%<br />
Sheep 5%<br />
Lamb 18%<br />
Sheep 5%<br />
Lamb 18%<br />
Goat 1% Goat 1%<br />
Sheep 5%<br />
Lamb 18%<br />
Goat 1%<br />
Goat 1%<br />
Queensland 35%<br />
Victoria 25%<br />
Queensland 35% Queensland<br />
Queensland 35%<br />
Victoria 25%<br />
Victoria 25%<br />
New South Wales 22% New South Wales 22%<br />
South Australia 8% South Australia 8%<br />
Western Australia 7% Western Australia 7%<br />
Victoria 25%<br />
New South Wales New 22% South W<br />
South Australia South 8% Austra<br />
Tasmania3%<br />
Tasmania3%<br />
Western Australia Western 7% Aust<br />
72<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong><br />
Tasmania3%<br />
Tasmania3%
statement of comprehensive income<br />
xxxxxxxxxxxxxxxxx<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
Notes <strong>2011</strong> 2010<br />
$ $<br />
Revenue 3 18,724,379 17,902,950<br />
Employee benefits expense (821,880) (867,638)<br />
Depreciation and amortisation expenses 4 (39,592) (51,642)<br />
Program expenditure (10,976,544) (13,591,943)<br />
Industry support expenditure (550,000) (575,000)<br />
Other expenses (844,740) (667,701)<br />
(13,232,756) (15,753,924)<br />
Surplus for the year 5,491,623 2,149,026<br />
Other comprehensive income – –<br />
Total comprehensive income for the year 5,491,623 2,149,026<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 73
statement of financial position<br />
AS AT 30 JUNE <strong>2011</strong><br />
Notes <strong>2011</strong> 2010<br />
$ $<br />
CURRENT ASSETS<br />
Cash and cash equivalents 6 25,214,646 22,476,704<br />
Trade and other receivables 7 3,218,779 3,008,438<br />
TOTAL CURRENT ASSETS 28,433,425 25,485,142<br />
NON-CURRENT ASSETS<br />
Plant and equipment 8 55,535 109,215<br />
TOTAL NON‐CURRENT ASSETS 55,535 109,215<br />
TOTAL ASSETS 28,488,960 25,594,357<br />
CURRENT LIABILITIES<br />
Trade and other payable 9 5,339,514 7,935,924<br />
Provisions 10 40,511 40,735<br />
TOTAL CURRENT LIABILITIES 5,380,025 7,976,659<br />
NON‐CURRENT LIABILITIES<br />
Provisions 10 28,092 28,478<br />
TOTAL NON‐CURRENT LIABILITIES 28,092 28,478<br />
TOTAL LIABILITIES 5,408,117 8,005,137<br />
NET ASSETS 23,080,843 17,589,220<br />
EQUITY<br />
Pre-Statutory accumulated funds 17 (a) 3,889,111 4,862,240<br />
Statutory R&D accumulated funds 17 (b) 19,191,732 12,726,980<br />
Statutory Marketing accumulated funds 17 (c) – –<br />
TOTAL EQUITY 23,080,843 17,589,220<br />
74<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
statement of chANges in equity<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
Notes <strong>2011</strong> 2010<br />
$ $<br />
Total equity at the beginning of the financial year 17,589,220 15,440,194<br />
Total comprehensive income for the year 5,491,623 2,149,026<br />
Total equity at the end of the financial year 23,080,843 17,589,220<br />
statement of cash flows<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
Notes <strong>2011</strong> 2010<br />
$ $<br />
CASH FLOW FROM OPERATING ACTIVITIES<br />
Receipts from Commonwealth Government funding 18,531,825 18,391,542<br />
Payments to suppliers and employees (16,890,513) (16,283,335)<br />
Interest received 1,096,064 839,422<br />
Net cash provided by operating activities 2,737,376 2,947,629<br />
CASH FLOW FROM INVESTING ACTIVITIES<br />
Proceeds from sale of property, plant and equipment 9,089 1,050<br />
Payment for property, plant and equipment (8,523) (5,980)<br />
Net cash provided by/(used in) investing activities 566 (4,930)<br />
Net increase in cash held 2,737,942 2,942,699<br />
Cash and cash equivalents at beginning of financial year 22,476,704 19,534,005<br />
Cash and cash equivalents at end of financial year 25,214,646 22,476,704<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 75
notes to the financial statements<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES<br />
The financial report is a general purpose financial report that<br />
has been prepared in accordance with Accounting Standards,<br />
Accounting Interpretations and other authoritative pronouncements<br />
of the <strong>Australian</strong> Accounting Standards Board and the <strong>Corporation</strong>s<br />
Act 2001.<br />
The financial report is for the entity <strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong><br />
<strong>Corporation</strong> Ltd as an individual entity. <strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong><br />
<strong>Corporation</strong> Ltd is a Company limited by guarantee, incorporated<br />
and domiciled in Australia<br />
The principal accounting policies adopted in the preparation of the<br />
financial statements are set out below. These policies have been<br />
consistently applied to all the years presented, unless otherwise<br />
stated.<br />
New, revised or amended Accounting Standards and<br />
Interpretations adopted<br />
The Company has adopted all of the new, revised or amending<br />
Accounting Standards and Interpretations issued by the <strong>Australian</strong><br />
Accounting Standards Board (‘AASB’) that are mandatory for the<br />
current reporting period.<br />
The Company has early adopted AASB 1053 ‘Application of<br />
Tiers of <strong>Australian</strong> Accounting Standards’ and AASB 2010-12<br />
‘Amendments to <strong>Australian</strong> Accounting Standards arising from<br />
Reduced Disclosure Requirements’. No other new, revised or<br />
amending Accounting Standards or Interpretations that are not yet<br />
mandatory have been early adopted.<br />
Any significant impact on the accounting policies of the<br />
Company from the adoption of these Accounting Standards and<br />
Interpretations are disclosed in the relevant accounting policy.<br />
The adoption of these Accounting Standards and Interpretations<br />
did not have any impact on the financial performance or position of<br />
the incorporation; however, the adoption of AASB 1053 and AASB<br />
2010-2 allowed the entity to remove a number of disclosures.<br />
AASB 1053 Application of Tiers of <strong>Australian</strong> Accounting<br />
Standards<br />
The Company has early adopted AASB 1053 from 1 July 2010.<br />
This standard establishes a differential financial reporting<br />
framework consisting of two Tiers of reporting requirements for<br />
preparing general purpose financial statements, being Tier 1<br />
<strong>Australian</strong> Accounting Standards and Tier 2 <strong>Australian</strong> Accounting<br />
Standards - Reduced Disclosure Requirements. The Company<br />
being classed as Tier 2 continues to apply the full recognition and<br />
measurements requirements of <strong>Australian</strong> Accounting Standards<br />
with substantially reduced disclosure in accordance with AASB<br />
2010-2.<br />
AASB 2010-2 Amendments to <strong>Australian</strong> Accounting<br />
Standards arising from Reduced Disclosure Requirement<br />
The Company has early adopted AASB 2010-2 from 1 July 2010.<br />
These amendments make numerous modifications to a range of<br />
<strong>Australian</strong> Accounting Standards and Interpretations, to introduce<br />
reduced disclosure requirements to the pronouncements for<br />
application by certain types of entities in preparing general<br />
purpose financial statements. The adoption of these amendments<br />
has significantly reduced the Company’s disclosure requirements.<br />
AASB 2009-5 Amendments to <strong>Australian</strong> Accounting<br />
Standards arising from the Annual Improvements Project<br />
The incorporated association has applied AASB 2009-5<br />
amendments from 1 July 2010. The amendments result in some<br />
accounting changes for presentation, recognition or measurement<br />
purposes, while some amendments that relate to terminology and<br />
editorial changes had no or minimal effect on accounting. The<br />
main changes were:<br />
AASB 101 ‘Presentation of Financial Statements’ - classification is<br />
not affected by the terms of a liability that could be settled by the<br />
issuance of equity instruments at the option of the counterparty;<br />
AASB 107 ‘Statement of Cash Flows’ - only expenditure that<br />
results in a recognised asset can be classified as a cash flow from<br />
investing activities;<br />
AASB 117 ‘Leases - removal of specific guidance on classifying<br />
land as a lease;<br />
AASB 118 ‘Revenue’ - provides additional guidance to determine<br />
whether any entity is acting as a principal or agent; and<br />
AASB 136 ‘Impairment of Assets’ - clarifies that the largest<br />
unit permitted for allocating goodwill, acquited in a business<br />
combination, is the operating segment as defined in AASB 8<br />
‘Operating Segments’ before aggregation for reporting purposes<br />
(a) Basis of preparation of the financial report<br />
Historical Cost Convention<br />
The financial report has been prepared under the historical cost<br />
convention, as modified by revaluations to fair value for certain<br />
classes of assets as described in the accounting policies.<br />
(b) Revenue<br />
Revenue from Membership contributions is recognised when<br />
the entity becomes entitled to receive the contribution from its<br />
Member.<br />
76<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
notes to the financial statements<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES cont.<br />
Revenue from the Government is recognised in the period that<br />
the Government raised the levy which is 28 days prior to when<br />
the payment is due and 35 days prior to forwarding on of the<br />
funds to AMPC<br />
Interest revenue is recognised when it becomes receivable<br />
on a proportional basis taking in to account the interest rates<br />
applicable to the financial assets.<br />
Other revenue is recognised when the right to receive the<br />
revenue has been established<br />
(c) Plant and Equipment<br />
Each class of plant and equipment is carried at cost or fair<br />
value less, where applicable, any accumulated depreciation<br />
Plant and Equipment<br />
Plant and equipment is measured on the cost basis.<br />
The carrying amount of plant and equipment is reviewed<br />
annually by Directors to ensure it is not in excess of the<br />
recoverable amount from those assets. The recoverable<br />
amount is assessed on the basis of the expected net cash<br />
flows which will be received from the assets employment<br />
and subsequent disposal. The expected net cash flows have<br />
been discounted to present values in determining recoverable<br />
amounts.<br />
Depreciation<br />
The depreciable amount of all fixed assets are depreciated over<br />
their estimated useful lives to the Company commencing from<br />
the time the asset is held ready for use.<br />
The depreciation rates used for each class of assets are:<br />
Class of fixed asset Depreciation rates Depreciation basis<br />
Motor Vehicles 25% Straight Line<br />
Office Equipment 20-25% Straight Line<br />
Furniture, Fixtures and Fittings 20-25% Straight Line<br />
Computer Equipment 25% Straight Line<br />
Leases<br />
Leases are classified at their inception as either operating<br />
or finance leases based on the economic substance of the<br />
agreement so as to reflect the risks and benefits incidental to<br />
ownership.<br />
Finance Leases<br />
Leases of fixed assets, where substantially all the risks and<br />
benefits incidental to the ownership of the asset, but not the<br />
legal ownership, are transferred to the Company are classified<br />
as finance leases. Finance leases are capitalised, recording an<br />
asset and a liability equal to the present value of the minimum<br />
lease payments, including any guaranteed residual values.<br />
Leased assets are depreciated on a straight line basis over<br />
their estimated useful lives where it is likely that the Company<br />
will obtain ownership of the asset, or over the term of the lease.<br />
Lease payments are allocated between the reduction of the<br />
lease liability and the lease interest expense for the period<br />
Operating Leases<br />
Lease payments for operating leases, where substantially all<br />
the risks and benefits remain with the lessor, are charged as<br />
expenses in the periods in which they are incurred.<br />
Lease incentives received under operating leases are<br />
recognised as a liability. Lease payments received reduced the<br />
liability.<br />
(d) Income Tax<br />
The entity is exempt from income tax under the provisions of<br />
Section 50(40) of the <strong>Australian</strong> Income Tax Assessment Act<br />
1997.<br />
(e) Employee Benefits<br />
Liabilities arising in respect of wages and salaries, annual leave,<br />
sick leave and any other employee benefits expected to be<br />
settled within twelve months of the reporting date are measured<br />
at their nominal amounts based on remuneration rates which<br />
are expected to be paid when the liability is settled. All other<br />
employee benefit liabilities are measured at the present value<br />
of the estimated future cash outflow to be made in respect of<br />
services provided by employees up to the reporting date.<br />
Contributions are made by the Company to an employee<br />
superannuation fund are recognised in the Statement of<br />
Financial Position as a liability, after deducting any contributions<br />
already paid and in the Statement of Comprehensive Income as<br />
an expense as they become payable. Prepaid contributions are<br />
recognised as an asset to the extent that a cash refund or a<br />
reduction in the future payment is available.<br />
(f) Impairment of assets<br />
Assets with an indefinite useful life are not amortised but<br />
are tested annually for impairment in accordance with AASB<br />
136. Assets subject to annual depreciation or amortisation<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 77
notes to the financial statements<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES<br />
are reviewed for impairment whenever events or circumstances<br />
arise that indicate that the carrying amount of the asset may be<br />
impaired. An impairment loss is recognised where the carrying<br />
amount of the asset exceeds its recoverable amount. The<br />
recoverable amount of an asset is defined as the higher of its fair<br />
value less costs to sell and value in use.<br />
(g) Comparative Figures<br />
Where required by Accounting Standards comparative figures have<br />
been adjusted to conform with changes in presentation for the<br />
current financial year.<br />
(h) Financial Instruments<br />
Classification<br />
The Company classifies its financial instruments in the following<br />
categories: financial assets at fair value through profit and<br />
loss, loans and receivables, held‐to‐maturity investments, and<br />
available‐for‐sale financial assets. The classification depends on the<br />
purpose for which the investments were acquired. Management<br />
determines the classification of its investments at initial recognition<br />
and re‐evaluates this designation at each reporting date<br />
Held‐to‐maturity investments<br />
Fixed term investments with an intention to be held to maturity are<br />
classified as held‐to‐maturity investments. They are measured at<br />
amortised cost using the effective interest rate method.<br />
Loans and receivables<br />
Loans and receivables are non‐derivative financial assets with fixed<br />
or determinable payments that are not quoted in an active market.<br />
They are measured at fair value at inception and subsequently at<br />
amortised cost using the effective interest rate method.<br />
Non‐interest bearing loans and receivables are designated as<br />
receivable ‘at call’ and are therefore recognised at their face value<br />
Financial liabilities<br />
Financial liabilities include trade payables, other creditors and<br />
loans from third parties including inter‐Company balances and<br />
loans from or other amounts due to Director‐related entities.<br />
Non‐derivative financial liabilities are recognised at amortised cost,<br />
comprising original debt less principal payments and amortisation.<br />
Non‐interest bearing loans and payables are payable on demand<br />
and are therefore recognised at their face value at inception.<br />
(i) Investment in AUS-MEAT Limited<br />
AUS-MEAT Limited (“AUS-MEAT”) was incorporated on 17 June<br />
1998, and the Company is one of two Members of AUS-MEAT. As<br />
AUS-MEAT is a tax exempt public Company limited by guarantee, it<br />
cannot distribute its surpluses to its Members; however, upon the<br />
event of the wind up of AUS-MEAT, the entity would be entitled to<br />
receive 50% of the net assets of AUS-MEAT. As there is no right by<br />
the entity to participate in a share of the ongoing results of AUS-<br />
MEAT, the use of equity accounting is not appropriate. Therefore,<br />
the equity accounting requirements of AASB 128 have not been<br />
applied. Details of the investment in AUS-MEAT are included in<br />
Note 15 to the financial statements.<br />
(j) Trade and Other Receivables<br />
Trade and other receivables are recorded at amounts due less any<br />
allowance for doubtful debts.<br />
(k) Trade and Other Payables<br />
Trade and other payables are recognised when the entity becomes<br />
obliged to make future payments resulting from the purchase of<br />
goods and services.<br />
(l) Provisions<br />
Provisions are recognised when the entity has a present obligation,<br />
the future sacrifice of economic benefits is probable, and the<br />
amount of the provision can be measured reliably.<br />
When some or all of the economic benefits required to settle a<br />
provision are expected to be recovered from a third party, the<br />
receivable is recognised as an asset if it is probable that recovery<br />
will be received and the amount of the receivable can be measured<br />
reliably.<br />
The amount recognised as a provision is the best estimate of the<br />
consideration required to settle the present obligation at reporting<br />
date, taking into account the risks and uncertainties surrounding<br />
the obligation. Where a provision is measured using the cash flows<br />
estimated to settle the present obligation, its carrying amount is<br />
the present value of those cash flows.<br />
(m) Plant Initiated Projects (PIP) Program<br />
Statutory Levies<br />
Of the total levies received during the financial year, 15 percent is<br />
available to support Research & Development programs initiated<br />
by Members through the plant initiated project program. Available<br />
PIP funds may be aggregated and utilised on combined approved<br />
projects by groups of Members.<br />
78<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
notes to the financial statements<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES<br />
Liability<br />
The amount recognised as a liability for plant initiated Research<br />
& Development programs is the amount of the reserved<br />
contributions that have been allocated to approved projects.<br />
The liability is treated as a payable under trade and other<br />
payables in the financial statements, in compliance with IFRS.<br />
Plant initiated projects with funding allocations are considered<br />
to be active until the Member notifies AMPC of completion or<br />
termination, at which point AMPC will derecognise the project<br />
and write back any remaining funds belonging to the project.<br />
(n) Goods and services tax<br />
Revenue, expenses and assets are recognised net of the<br />
amount of goods and services tax (GST), except where the<br />
amount of GST incurred is not recoverable from the taxation<br />
authority. In these circumstances, the GST is recognised as<br />
part of the cost of acquisition of the asset or as part of the<br />
expense.<br />
Receivables and payables are stated with the amount of GST<br />
included. The net amount of GST recoverable from, or payable<br />
to, the ATO is included as a current asset or liability in the<br />
statement of financial position.<br />
Cash flows are included in the statement of cash flows on a<br />
gross basis. The GST components of cash flows arising from<br />
investing and financing activities which are recoverable from, or<br />
payable to, the ATO are classified as operating cash flows.<br />
(o) Authorisation for Issue<br />
The financial report was authorised for issue on 19 October<br />
<strong>2011</strong> by the Board of Directors.<br />
NOTE 2: critical accounting estimates and judgements<br />
Estimates and judgements are based on past performance and<br />
management’s expectation for the future.<br />
Critical accounting estimates and assumptions<br />
The Company makes certain estimates and assumptions<br />
concerning the future, which, by definition will seldom represent<br />
actual results. No estimates and assumptions could have a<br />
material impact on the assets and liabilities in the next financial<br />
year, other than those disclosed elsewhere in the financial<br />
report.<br />
NOTE 3: REVENUE<br />
Notes <strong>2011</strong> 2010<br />
$ $<br />
Operating activities<br />
– government funds 16,705,765 16,712,613<br />
– interest 1,421,556 1,008,433<br />
– reversal of PIP fundings 183,625 181,904<br />
– litigation recovery 413,433 –<br />
Total revenue 18,724,379 17,902,950<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 79
notes to the financial statements<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
NOTE 4: surplus for the year<br />
Notes <strong>2011</strong> 2010<br />
$ $<br />
Surplus for the year has been determined after:<br />
Expenses:<br />
Depreciation of non‐current assets<br />
– motor vehicles 9,084 19,787<br />
– office equipment 4,490 4,830<br />
– furniture, fixtures and fittings 20,953 21,294<br />
– computer equipment 5,065 5,731<br />
Depreciation of plant and equipment 39,592 51,642<br />
Remuneration of the auditors for:<br />
– audit and review services 27,000 27,000<br />
– other services – –<br />
– other services to related practices of the auditor – –<br />
Total 27,000 27,000<br />
Net loss on disposal of non‐current assets<br />
Property, plant and equipment 13,522 1,271<br />
NOTE 5: key management personnel compensation<br />
Directors<br />
– Short‐term benefits (Directors Fees) 206,667 208,861<br />
– Post-Directorship benefits (Superannuation) 18,600 18,797<br />
225,267 227,658<br />
Executives<br />
– Short‐term employee benefits (Salary) 116,973 158,101<br />
– Post-employment benefits (Superannuation) 9,285 12,881<br />
– Other long term benefits (Long Service Leave) 8,526 2,752<br />
– Termination benefits 56,590 –<br />
191,374 173,734<br />
416,641 401,392<br />
80<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
notes to the financial statements<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
NOTE 5: key management personnel compensation<br />
Directors receive Directors fees of $20,000 per annum plus 9% superannuation of $1,800. The Chairman receives $50,000 per annum<br />
plus 9% superannuation of $4,500.<br />
The names of Directors who have held office during the year (and included as key personnel in addition to CEO) are:<br />
G Hardwick G Burridge R B James<br />
S Kelly B Carey T Maguire<br />
J Berry M Jackson P Noble<br />
Total aggregated out of pocket costs including travel and related expenses incurred by Directors during the year was $36,233.<br />
NOTE 6: cash and cash equivalents<br />
Notes <strong>2011</strong> 2010<br />
$ $<br />
Cash on hand 200 663<br />
Cash at bank 2,055,939 2,755,560<br />
Cash on term deposit 23,158,507 19,720,481<br />
25,214,646 22,476,704<br />
NOTE 7: trade and other receivables<br />
CURRENT<br />
Trade debtors 2,538,351 2,653,371<br />
Other debtors 680,428 355,067<br />
3,218,779 3,008,438<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 81
notes to the financial statements<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
NOTE 8: Plant and equipment<br />
Notes <strong>2011</strong> 2010<br />
$ $<br />
Motor vehicles<br />
At cost 34,754 79,149<br />
Less accumulated depreciation (31,133) (44,643)<br />
3,621 34,506<br />
Office equipment<br />
At cost 21,213 22,894<br />
Less accumulated depreciation (15,615) (12,806)<br />
5,598 10,088<br />
Furniture, fixtures and fittings<br />
At cost 125,604 126,619<br />
Less accumulated depreciation (87,814) (68,053)<br />
37,790 58,566<br />
Computer equipment<br />
At cost 28,714 41,932<br />
Less accumulated depreciation (20,188) (35,878)<br />
8,526 6,055<br />
Total plant and equipment 55,535 109,215<br />
(a) Movements in Carrying Amounts<br />
Movement in the carrying amounts for each class of plant and equipment between the beginning and the end of the current financial year.<br />
Furniture<br />
Motor vehicles Office fixtures Computer<br />
& fittings equipment & fittings equipment Total<br />
$ $ $ $<br />
<strong>2011</strong><br />
Balance at the beginning of the year 34,506 10,088 58,566 6,055 109,215<br />
Additions – – 177 8,346 8,523<br />
Disposals (21,801) – – (810) (22,611)<br />
Depreciation expense (9,084) (4,490) (20,953) (5,065) (39,592)<br />
Carrying amount at end of the year 3,621 5,598 37,790 8,526 55,535<br />
82<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
notes to the financial statements<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
NOTE 9: trade and other payables<br />
Notes <strong>2011</strong> 2010<br />
$ $<br />
Current unsecured liabilities<br />
Trade creditors 1,322,858 1,695,306<br />
Plant initiated projects 12 1,746,424 1,878,996<br />
Other program payables 1,918,036 4,311,634<br />
Sundry creditors and accruals 352,196 49,988<br />
5,339,514 7,935,924<br />
NOTE 10: provisions<br />
CURRENT<br />
Employee benefits 40,511 40,735<br />
NON‐CURRENT<br />
Employee benefits 28,092 28,478<br />
Note 11: company details<br />
The registered office of the Company is:<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd<br />
Suite 205, Level 2<br />
460 Pacific Highway<br />
St Leonards NSW 2065<br />
Note 12: plant inititated prOJECT liability<br />
Opening balance included in payables 1,878,996 979,680<br />
Total PIP transactions approved for all Members 1,641,174 3,356,526<br />
Reductions arising from payments of approved PIPs (1,590,121) (2,275,306)<br />
Reductions resulting from reversal of PIP fundings (183,625) (181,904)<br />
Closing balance included in payables (note 9) 1,746,424 1,878,996<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 83
notes to the financial statements<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
NOTE 13: related party disclosure<br />
Type of Transaction Terms and Conditions Class of Related <strong>2011</strong> 2010<br />
of type of transaction Party $ $<br />
Operational and Normal Commercial Associate<br />
support funding terms and conditions Aus-<strong>Meat</strong> Ltd $550,000 $575,000<br />
During the period AMPC has approved PIP’s for a number of Director-related entities under the PIP program. Under the Company’s<br />
Constitution, all transactions with Director related entities are on normal commercial terms and are consistent with those provided to all<br />
Members.<br />
The following table provides a breakdown of the movement and final balance of PIPs of Director related parties.<br />
Transaction value year<br />
Balance outstanding<br />
ended 30 June (1)<br />
as at 30 June<br />
<strong>2011</strong> 2010 <strong>2011</strong> 2010<br />
$ $ $ $<br />
Plant Initiated Projects 1,033,814 2,331,281 841,310 1,126,728<br />
NOTE 14: members’ liability<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd is incorporated in New South Wales as a Company limited by guarantee. Under the Company’s<br />
Constitution, the liability of the governing Members is limited and shall not exceed $100 on the winding up of the Company.<br />
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notes to the financial statements<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
NOTE 15: associated entities<br />
Name of Entity Principal Activity Ownership Interest <strong>2011</strong> Ownership Interest 2010 Carrying Amount<br />
Aus-<strong>Meat</strong> Limited Services to the Food Industry 50% 50% Nil<br />
Notes <strong>2011</strong> 2010<br />
$ $<br />
Summarised financial position of associate:<br />
Current Assets<br />
Cash 2,140,437 1,347,302<br />
Receivables 892,313 1,370,571<br />
Investments 1,663,988 1,272,886<br />
Other 656,950 274,597<br />
Non Current Assets<br />
Investments 630,309 561,414<br />
Plant and equipment 3,438,342 3,526,676<br />
Current Liabilities<br />
Accounts payable (3,140,724) (2,703,275)<br />
Non Current Liabilities<br />
Provisions (154,307) (126,923)<br />
Net assets 6,127,308 5,523,248<br />
Net surplus for the period 165,474 525,621<br />
Other comprehensive income 438,586 84,617<br />
NOTE 16: economic dependence<br />
The Company is dependent on the collection of the Statutory levy from the processors by the government and the expenditure of the<br />
Statutory levies in accordance with the Funding Agreement 2007-10 with the Commonwealth Department of Agriculture, Fisheries<br />
and Forestry. During the last quarter of 2010 and first half of <strong>2011</strong>, AMPC engaged with DAFF towards the revision and renewal of its<br />
Deed of Agreement with the Commonwealth Government. The new agreement provides for a more consistent approach across the<br />
Rural Research & Development <strong>Corporation</strong>s and for AMPC will take effect over a four year timeframe upon the finalisation of Federal<br />
Minister approval in <strong>2011</strong>.<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 85
notes to the financial statements<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
NOTE 17: accumulated funds<br />
(a) Pre Statutory funds<br />
The pre-Statutory funds records the Company’s retained surpluses prior<br />
to the Statutory Funding Agreement which commenced 1 September 2007:<br />
Notes <strong>2011</strong> 2010<br />
$ $<br />
Movements during the financial year:<br />
Opening balance 4,862,240 7,543,662<br />
Allocation of current year surplus (652,878) (2,613,557)<br />
Transfer to Statutory Marketing funds (320,252) (67,865)<br />
CLOSING BALANCE 3,889,111 4,862,240<br />
(b) Statutory Research & Development funds<br />
The R&D funds records surpluses contributed by R&D portion of the<br />
processor levy in accordance with the Funding Agreement 2007-10:<br />
Movements during the financial year:<br />
Opening balance 12,726,980 7,468,909<br />
Allocation of current year surplus 6,464,752 5,258,071<br />
CLOSING BALANCE 19,191,732 12,726,980<br />
(c) Statutory Marketing funds<br />
The Marketing funds records surpluses contributed by Marketing<br />
portion of the processor levy in accordance with the Funding Agreement 2007-10:<br />
Movements during the financial year:<br />
Opening balance – 427,624<br />
Allocation of current year surplus (320,252) (495,489)<br />
Transfer from Pre Statutory funds 320,252 67,865<br />
CLOSING BALANCE – –<br />
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<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
notes to the financial statements<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
NOTE 18: OPERATING LEASES<br />
Non-cancellable operating lease rentals are payable as follows:<br />
Notes <strong>2011</strong> 2010<br />
$ $<br />
Less than one year 62,501 60,21<br />
Between one and five years 27,819 90,320<br />
More than five years – –<br />
TOTAL 90,320 150,533<br />
The Company leases the head office under an operating lease. The lease expires on 31 December 2012 with an option to renew<br />
the lease after that date. Lease payments are increased annually to reflect Consumer Price Index. During the year ended 30 June<br />
<strong>2011</strong> an amount of $57,185 was recognised as an expense in respect of operating leases (2010: $56,520). There were no<br />
contingent rental amounts recognised.<br />
NOTE 19: ACCUMULATED EXPENSES REGARDING FRAUD<br />
As previously reported, the Company had identified a misappropriation of funds amounting to $4,261,488 in previous financial<br />
years. The Company is actively seeking recoupment of the funds and has incurred legal, forensic accountant and independent<br />
expert expenses throughout the process. Below is a reconciliation of the total expenses incurred to balance date in relation to this<br />
issue.<br />
Opening balance 796,286 626,538<br />
Incurred in current year (1) 354,947 169,748<br />
Accumulated expenses incurred to balance date 1,151,233 796,286<br />
(1) Expenses are included in Other Expenses on the face of the Statement of Comprehensive Income<br />
NOTE 20: CONTINGENCIES<br />
Contingent Liabilities<br />
The fifteen percent of received levies allocated to the PIP program remains available for three years, after which the commitment<br />
lapses. As at 30 June <strong>2011</strong>, the total R&D funds held in reserves for potential plant initiated projects are $8.84M (30 June 2010:<br />
$9.75M)<br />
Contingent Assets<br />
The Company is continuing its activities in pursuing its misappropriated funds. The Company will report outcomes against its<br />
activities during 2012.<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 87
DIRECTORS’ DECLARATION<br />
The Directors of the Company declare that:<br />
1. The financial statements and notes, as set out on pages 73 to 87, are in accordance with<br />
the <strong>Corporation</strong>s Act 2001:<br />
(a) c omply with Accounting Standards in Australia and the <strong>Corporation</strong>s Regulations 2001;<br />
and<br />
(b)<br />
give a true and fair view of the financial position as at 30 June <strong>2011</strong> and performance for the year<br />
ended on that date of the Company.<br />
2. In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as<br />
and when they become due and payable.<br />
This declaration is made in accordance with a resolution of the Board of Directors.<br />
Director<br />
G Hardwick (Chairman)<br />
Director<br />
S Kelly (Deputy Chairman)<br />
Dated this 19th day of October <strong>2011</strong><br />
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DIRECTORS’ independent REPORT audit report<br />
xxxxxxxxxxxxxxxxx<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 89 19
independent audit report to the members<br />
FOR THE YEAR ENDED 30 JUNE <strong>2011</strong><br />
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<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
Appendix : List of Abbreviations<br />
ABARES<br />
ALKC<br />
AMPC<br />
<strong>Australian</strong> Bureau of Agricultural and<br />
Resource Economics & Sciences<br />
Anaerobic Lagoon Knowledge Centre<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong><br />
FRP<br />
ftA<br />
FSANZ<br />
full Research Proposal<br />
free Trade Agreement<br />
food Standards Australia and<br />
new Zealand<br />
AMIC<br />
<strong>Australian</strong> <strong>Meat</strong> Industry Council<br />
GHG<br />
Greenhouse Gas<br />
AEMIS<br />
<strong>Australian</strong> Export <strong>Meat</strong> Inspection<br />
System<br />
iMACA<br />
International <strong>Meat</strong> Automation<br />
Conference Australia<br />
AL<br />
Anaerobic Lagoon<br />
ICMJ<br />
Intercollegiate <strong>Meat</strong> Judging Association<br />
AOP<br />
Annual Operating Plan<br />
M2M<br />
Methane to Markets<br />
AQIS<br />
<strong>Australian</strong> Quarantine and<br />
inspection Service<br />
MINTRAC<br />
National <strong>Meat</strong> Industry Training<br />
Advisory Council<br />
ARLP<br />
<strong>Australian</strong> Rural Leadership Program<br />
MISP<br />
<strong>Meat</strong> Industry Strategic Plan<br />
AWSC<br />
Animal Welfare Science Centre<br />
MIS<br />
<strong>Meat</strong> Industry Services<br />
AWSRC<br />
BFTF<br />
BOO<br />
BSE<br />
Animal Welfare Standards<br />
Review Committee<br />
Beef Funding for the Future<br />
Build Own Operate<br />
bovine Spongiform Encephalopathy<br />
MLA<br />
MOU<br />
MSA<br />
NGERS<br />
<strong>Meat</strong> & Livestock Australia<br />
Memorandum of Understanding<br />
<strong>Meat</strong> Standards Australia<br />
national Greenhouse & Energy<br />
Reporting System<br />
CAL<br />
Covered Anaerobic Lagoon<br />
NLIS<br />
National Livestock Identification System<br />
CBA<br />
Cost Benefit Analysis<br />
NSW<br />
new South Wales<br />
CEO<br />
Chief Executive Officer<br />
OH&S<br />
occupational Health and Safety<br />
CIE<br />
Centre for International Economics<br />
PIC<br />
Property Identification Codes<br />
COD<br />
Chemical Oxygen Demand<br />
PIMC<br />
Primary Industries Ministerial Council<br />
CRC<br />
Cooperative Research Centre<br />
PIP<br />
Plant Initiated Project<br />
CRRDC<br />
CSIRO<br />
DA<br />
DAA<br />
DAF<br />
DAFF<br />
DEEDI<br />
Council of Rural Research &<br />
Development <strong>Corporation</strong>s<br />
Commonwealth Scientific &<br />
industrial Research Organisation<br />
Dairy Australia<br />
Dieticians Association of Australia<br />
Dissolved Air Floatation<br />
Department of Agriculture, Fisheries<br />
and Forestry<br />
Department of Employment, Economic<br />
Development & Innovation<br />
PRP<br />
QA<br />
QCMPA<br />
R&D<br />
RD&E<br />
RDC<br />
RI<br />
RMAC<br />
SA<br />
Preliminary Research Proposal<br />
quality Assurance<br />
Queensland Country <strong>Meat</strong><br />
<strong>Processor</strong>s Association<br />
Research & Development<br />
Research, Development & Extension<br />
Research & Development <strong>Corporation</strong><br />
Refrigeration Index<br />
Red <strong>Meat</strong> Advisory Council<br />
South Australia<br />
dfAT<br />
Department of Foreign Affairs and Trade<br />
SFA<br />
Statutory Funding Agreement<br />
DIAL<br />
Dairy Innovation Australia Ltd<br />
SOP<br />
Standard Operating Procedures<br />
EAD<br />
emergency Animal Disease<br />
SPS<br />
Sanitary and Phytosanitary<br />
EADRA<br />
Emergency Animal Disease Response<br />
Agreement<br />
TPAD<br />
Temperature Phased Anaerobic<br />
Digestion<br />
EPA<br />
environmental Protection Agency<br />
WTO<br />
world Trade Organisation<br />
ERP<br />
extended Residue Program<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong> 91
NOTES<br />
92<br />
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong> <strong>Corporation</strong> Ltd | Annual Report <strong>2011</strong>
<strong>Australian</strong> <strong>Meat</strong> <strong>Processor</strong><br />
<strong>Corporation</strong> Ltd<br />
ABN 67 082 373 448<br />
Suite 205, Level 2, 460 Pacific Highway,<br />
St Leonards NSW 2065<br />
PO BOX 11, St Leonards NSW 1590<br />
Tel: 02 9436 0042<br />
Fax: 02 9436 0343<br />
Email: ampc@ampc.com.au<br />
www.ampc.com.au