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[sharechat] BPC - still cheap, but for how long...

From: "B.Bourke" <>
Date: Sat, 28 Sep 2002 21:26:19 +1200

Burns Philip (BPC) is part of an industry that in NZ and Ausy is still going through restructuring afetr 20 years of change.
For those who can remember back, there used to be a huge range of smallgoods processors in NZ, and even greater numbers in Ausy.  I can think of Tiki, Kiwi, Whanganui Mild Cure, Tenderkist, hellaby Peach, Hydra, Huttons, and at least another 10 sudstantial producers.
To supply this group there also existed a range of suppliers. BPC wasnt part of them then, but well established names at the time were: Globus, Mauri Brothers, Dunnighams, Lewis Grey, Lindgrens, and probably another 3 or 4 rather large companies.  These companies also supplied the range of other food producers.
Today we have one or two smallgoods producers that have replaced all those who used to exist. The main one is Huttons (who own many other bands). The bakery industry has reduced to one or two big players. Consequently the supplier industry has also shrunk. Lindgrens no longer exists, Lewis Grey is almost out of the industry, Mauri Bros became a non player a long time ago, Globus recently closed all its offices and sold its ingredients division to an another marketer.
BPC's part in food industry supply came out of the demise of Lindrens.  It was very complicated - it went thru German or Dutch hands - and most watchers thought it was just a matter of when , not if , it would go under.
I am surprised that it hasnt gone under. I do think the dividends are not 'real' in that I just cant see where the profits are coming from - so I can only assume that they are paid out of borrowed money - in an effort to make it look good in the hope that someone will come along and sell it.  That some one would be a greedy food producer who wants to vertically integrate, or perhaps a carbohydrate and/or protein or raw material producer who wants to get closer to the market - like a dairy company (Fonterra??) making large volumes of milk powder or food casein.
Got to give it to him - Graeme Hart seems to be able to organise good deals for himself.

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