Hans enters voluntary administration

Posted by Daniel Palmer on 28th November 2008

Hans, one of Australia’s largest smallgoods manufacturers, has entered voluntary administration but the business will continue operating while a buyer is sought.

Higher costs and stronger pork competition has been attributed with the collapse of the Hans group of companies, with KordaMentha appointed as administrators today.

Mark Mentha, from KordaMentha, said the companies, including Hans Continental Smallgoods and the Swicker’s Kingaroy Bacon Factory, would trade normally while the administrators tried to sell the business as a going concern.

“It’s business as usual and there is no immediate threat to the jobs of production workers,” Mark Mentha, from KordaMentha, said.

Hans, an employer of about 1400 people in Queensland, NSW and Victoria, produces ham, bacon, salami, sausages and franks, continental smallgoods and fresh pork products for both domestic and international markets.

“Hans is a great brand and has some world class facilities, so our first aim will be to offer the business to buyers with related interests so that some synergies may be achieved,” Mr Mentha added. “We urge all Australian consumers to buy Australian and buy Hans in the lead-up to Christmas to help secure the future of the workers in this business.”

The company began operations in 1960 and currently operates out of three manufacturing sites Colmslie and Wacol in Brisbane, and Blacktown in Sydney as well as having a distribution centre in Brisbane (Hemmant). In the year 2000 they became Australia’s largest smallgoods manufacturer, though they have since relinquished their market leading position.

Hans also is the majority shareholder in the Swicker’s factory, which is the second largest pork producer in Australia. It operates an abattoir and production facility in Kingaroy, Queensland, Swicker’s employs about 400 people. Hans also has an office in Doncaster, Melbourne.

A third company, Sun Pork Foods, is also in voluntary administration. Sun Pork sells offal from the Kingaroy plant.

Mr Mentha advised that Hans had been hurt by the same factors impacting on the whole industry; higher feed costs caused by the drought and increased competition from subsidised importers selling frozen ham. He added that the entitlements of employees were assured.

Hans was to be sold to private equity firm Anchorage Capital Partners earlier this year but its parent company, Japan Tobacco Inc. (JT) did not proceed with the sale of Hans and Swickers Kingaroy Bacon (which Hans has a majority stake in).

The companies had been working through the transaction arrangements until October when both parties agreed to terminate the agreement.

The decision was not to impact the on-going operations of either Hans and Swickers, Hans COO Ross Ingram said at the time. “We are disappointed that the sale did not progress,” he advised. “JT will continue to examine available options for the Hans and Swickers business, but it was too early to speculate about what these may be.”

It has been a tumultuous year for Australia’s smallgoods sector with this announcement following news of a major restructure at Don KRC, another leading Australian smallgoods manufacturer, which will result in the loss of 640 jobs by 2010.