DEMAND FOR STOCKFEED AND IMPROVED MARGINS TOGETHER WITH INCREASED

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DEMAND FOR STOCKFEED AND IMPROVED MARGINS TOGETHER WITH INCREASED Powered By Docstoc
					review of operations



Ridley agRipRoducts
     DemAnD FoR stockFeeD      sales volume increased by 8% to a record
                               1.8 million tonnes as a result of growth in
                                                                                 The overall demand for feed has enabled us to
                                                                                 enjoy high levels of utilisation at our mills.

              AnD imPRoveD     volumes and market share in most species
                               sectors, with beef, poultry, pig and sheep
                                                                                 packaged products sales volume increased

          mARgins togetheR     performing particularly strongly.
                                                                                 slightly in the period. more pleasing was a
                                                                                 shift in product mix to higher margin categories

       With incReAseD sAles    feed sales to the beef and sheep sectors
                               more specifically experienced the largest
                                                                                 and a continued lift in margins generally.
                                                                                 The business has recruited new staff; and a

       oF AquA-FeeD AnD ccD    percentage volume growth, due partly to
                               the drought conditions. sales of sheep feed
                                                                                 range of initiatives, such as the automation of
                                                                                 packaging lines at key sites and completion
          AnimAl heAlth AnD    doubled and for beef lifted 47%, but these
                               species only represent approximately
                                                                                 of the brand rationalisation mentioned in last
                                                                                 year’s annual report, will reduce costs and
        nutRition PRoDucts     10% of bulk sales. demand, though
                               seasonal and varying year-on-year, has
                                                                                 deliver increased sales. as well, simplified
                                                                                 products, a transition to 20 kilogram bags,
       contRiButeD to A 16%    grown significantly in both categories.           and the introduction of new packaging, labels,

      incReAse in oPeRAting    sales of dairy feed, which represent close to
                               25% of our bulk sales, were up 2% in a market
                                                                                 graphics and updated marketing materials has
                                                                                 strengthened brand recognition.

                eARnings to    which has a shrinking herd, but where feeding     The supplements business had a more

              $18.4 million.   has been more intensive. milk production
                               in australia has contracted to 9.6 billion
                                                                                 challenging year, with sales volume
                                                                                 substantially down on expectations.
                               litres, but global prices for dairy products      unseasonable winter rain across central
                               are at unprecedented highs, driven by strong      and northern Queensland, and the northern
                               global demand, cutbacks in european export        Territory, along with poor pastures in south
                               subsidies and the drought in australia. dairy     east Queensland led to reduced demand.
                               companies progressively increased prices          This was partly offset by drought conditions
                               during the year and announced opening             in nsw, victoria and south australia.
                               prices for the current season 25 – 40% up
                                                                                 results were also affected by commissioning
                               on those last year. although feed prices have
                                                                                 issues at the wacol facility which resulted in
                               increased significantly, there continues to
                                                                                 some production being moved to Townsville.
                               be a compelling case to feed intensively for
                                                                                 The wacol upgrade lifts our production capacity
                               increased milk production. The outlook for the
                                                                                 and efficiency. resulting benefits will be
                               dairy feed market segment remains strong.
                                                                                 evident this year.
                               pig feed sales, which are approximately
                                                                                 our aqua-feed business experienced a
                               25% of bulk sales, lifted 5% over the year.
                                                                                 relatively slow start to the year, but finished
                               many pig producers are experiencing difficult
                                                                                 strongly with record second half sales and
                               trading conditions. The strong australian
                                                                                 volumes 27% above those of the previous year.
                               dollar, coupled with high feed costs, is making
                                                                                 favourable growth conditions for key categories
                               imports more competitive, meaning further
                                                                                 and increased market share resulting from
                               industry consolidation is likely.
                                                                                 good feed performance doubled earnings
                               poultry sector sales, which account for           from the business. market growth continues
                               40% of our bulk feed production, grew almost      to be strong and options for servicing growing
                               8% from last year. poultry markets are            demand are being considered.
                               relatively stable, with chicken meat, turkey,
4                             duck and egg consumption continuing to grow.
                                                                                                                                Key                   19   sT arnaud
                                                                                                                                manufacTurIng         20   BendIgo
                                                                                                                                & dIsTrIBuTIon        21   Terang
                                                                                                     1                          dIsTrIBuTIon only     22   colac
                                                                                                                                                      23   murray BrIdge
                                                                                                         2                       1   aTherTon         24   wasleys
                                                                                                                                 2   TownsvIlle       25   norTham
                                                                                                                                 3   rockhampTon
                                                                                                                                 4   wondaI
                                                                                                                  3
                                                                                                                                 5   dalBy
                                                                                                                                 6   narangBa
                                                                                                                      4          7   ToowoomBa
                                                                                                                  5 76
                                                                                                                    9
                                                                                                                        8        8   wacol
                                                                                                                                 9   clIfTon
                                                                                                                   10           10   TamworTh
                                                          25                                                      11            11   Taree
                                                                                        24                   12                 12   weTherIll park
                                                                                        23
                                                                                                18   13                         13   corowa
                                                                                             19                                 14   mooroopna
                                                                                                20 14
                                                                                             21 17 16 15                        15   maffra
                                                                                               22
                                                                                                                                16   pakenham
                                                                                                                                17   dandenong
                                                                                                                                18   gunBower




ccd animal health and nutrition achieved a
36% lift in earnings despite a lower off take
                                                               australia feeds ’000 tonnes
in the supplements market. agency product              DAIRY   07                                                      383.6
                                                               06                                                     374.6
sales grew progressively through the year.
                                                        BEEF   07               152.4
                                                               06       109.3
champion liquid feeds, the liquid feeds
                                                     POULTRY   07                                                                                                  678.6
joint venture with westway corporation,                        06                                                                                          635.0
experienced difficulties with the supply of              PIG   07                                                       390.5
molasses from Queensland, resulting in                         06                                                     373.3
                                                       SHEEP   07    37.6
rationing in southern markets. a number                        06 20.4
of supply chain improvements have been           SUPPLEMENTS   07 29.4
initiated to address these issues and sustain                  06 24.8
performance in the current season. with               EQUINE   07   37.1
                                                               06 32.8
the establishment of facilities at Braybrook,          OTHER   07         113.8
melbourne, and mackay, the business is well                    06          124.5
positioned for the future.

looking forward to 2008, the good
performances seen in aqua-feed, ccd animal                     2007 highlights
health and nutrition, and packaged products
are set to continue. Bulk feed sales to the                    • eARnings uP 16% to $18.4 million
dairy, sheep and poultry sectors should
remain strong, as high feed costs have
                                                               • volume uP 8%
generally been able to be passed on. sales                     • sAles uP 36% to $667 million
to the pig sector should remain in line with
this year. The re-entry of the united states                   • AquA-FeeD sAles volumes uP 27%
into north asian markets, the appreciating
australian dollar and the high feed costs that
                                                               • ccD AnimAl heAlth AnD nutRition eARnings uP 36%
increasingly affected beef producers over the
last 12 months will likely impact sales growth
this coming year.

In addition to monitoring grain market
deregulation and water issues in the
coming year, we will also be reviewing our
manufacturing lines to ensure we not only
comply with but exceed biosecurity standards
and examining opportunities to improve
logistics and warehousing arrangements to
better manage inventory.




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Description: DEMAND FOR STOCKFEED AND IMPROVED MARGINS TOGETHER WITH INCREASED