The Australian media have reported Nichols Poultry is poised to accept a bid in the region of AUD$12m ($8.6m) for TasFood Limited, although no official confirmation has been made by either company.
The vertically integrated chicken producer and processor has been doubling in size every five years, according to Nichols Poultry’s managing director Rob Nichols. The company produces about 45,000 chickens every week and the takeover by TasFood - which will see all 60 of Nichols staff retained - could help the chicken company build on its growth.
‘We need to grow’
“Our last major expansion was a couple of years ago and that’s now working really well for us, but we are already at the point where we need to grow again,” said Nichols Poultry managing director Rob Nichols in a recorded interview with ABC Rural.
“For Nichols Poultry to achieve the potential we all know it can do, we really wanted to bring somebody on board that could help us there. If the business is to double from where it is at the moment, then we certainly need a huge amount of breeder facilities [and] we probably need new hatchery facilities,” he added.
Nichols Poultry has supplied Tasmania with poultry for nearly three decades and with a 25% market share in the region, the island south of Australia represents the company’s primary market.
“There’s up to 20,000 tonnes of grain that could be used in the state. We are looking at alternative protein meals and protein sources that we can grow within Tasmania and the story goes on as to how far the financial benefits spread throughout this community,” added Nichols.
If - or more possibly when - the AUD$12m takeover goes through, it will be TasFood Limited’s first major acquisition since its unsuccessful attempt to buy one of Australian’s largest dairy farming business, Van Diemen’s Land Company, in 2015.