MBL CEO McLean (Warren McLean). (, Australia)
Master Butchers Co-operative (MBL), a food services company, is facing a financial crisis due to soaring energy prices in South Australia, the Australian newspaper reported. The company is said to have a history of 112 years and more than 130 employees.
Yesterday, South Australia`s governor, Wendry (Jay Weatherill), congratulated South Australia on meeting its 50 percent energy target eight years ahead of schedule. However, the food services company said it had recently faced the threat of closure due to "a mess in energy policy" in South Australia.
MBL said soaring electricity and gas prices had pushed up energy costs. (Warren McLean), chairman of MBL, said in a notice that despite serious efforts to seek better contracts for electricity and gas, But "huge energy costs will still have a serious impact on the bottom line of the company`s budget." He pointed out that MBL was reluctant to sign a new electricity contract, which would rise A $ seven hundred and fifty thousand a year.
MBL`s electricity costs are said to have risen 448 percent since 2010, compared with inflation of 13.5 percent.
"the company is also negotiating a new gas contract, which costs three times as much gas as the current contract, between A $1.2 million and A $2.4 million a year. Our current contract expires at the end of December and we are looking for ways to address the threat to MBL, "McLean said.
McLean told the Australian newspaper that the increase in energy costs would "run out of the company`s annual profits over the past two years." As the price of electricity goes up, it is difficult for the company to carry on.
It is understood that most of MBL energy is used in Winfield (Wingfield) and Keith (Keith) processing plants. There, nearly 140000 tons of waste water from the food industry could not be sent to landfills. Plus tallow and diet are commodity-priced products, MBL cannot make up for production costs by raising prices.
"while electricity prices are a major problem, gas shortages are a bigger problem, which will continue to push up gas prices. There are only two companies that are willing to offer us and other suppliers are unable to meet our energy needs, "McLean said.
Recently, MBL invested 8 million in new processing equipment to meet the development needs of the poultry and pork industries. McLean says MBL is the only processing plant of this type in South Australia. If forced to close, these processed products will be sent to Victoria.
