BX Foods, a meat processor located in North Otago and owned by China’s Binxi Group, has come to a settlement in a legal dispute with three of its former directors.
The company had claimed that there were breaches of fiduciary duty, with at least $11.2 million worth of meat being redirected to Kereru Foods, a business associated with two of the former directors, over the course of three years.
Dispute Over Alleged Improper Redirection of Meat Products Settled
The dispute centred on claims that products processed by Hawke’s Bay-based Progressive Meats were improperly released to Kereru Foods, a business owned by ex-directors Arron Hoyle and Gerard Brier. Richard Thorp, another former executive, was also removed.
According to BX Foods’ recently filed 2023 financial accounts—more than a year overdue—“legal proceedings against certain former directors and contractors, and their related parties, had been settled.”
The settlement includes the dropping of all counterclaims. “The group will receive the proceeds from this settlement over the upcoming 12 months, spread between the 2025 and 2026 financial years,” the accounts stated.
Sees Revenue Growth but Posts $7.9 Million Loss
BX Foods saw a revenue increase from $105.5 million in 2022 to $115.9 million in 2023, but still reported a $7.9 million loss, a significant decline from the $1.3 million profit the previous year. The company’s net cash flow also turned negative, with $6.9 million in outflows reported for the year.
The financial downturn was attributed to falling international demand and weaker red meat prices. “Red meat prices were severely depressed after a drop in demand overseas in 2023,,” the company reported.
However, BX Foods has noted a positive shift in recent trends, with lamb contracts being advertised between $9.60 and $9.90 per kilogram for delivery from July to October 2024.
Financial Moves Highlight BX Foods’ Path to Stability
BX Foods’ parent company, Heilongjiang Binxi Cattle Industry Co, took measures to solidify the company’s financial position by converting a $6 million shareholder loan into shares at 10 cents per share.
Additionally, BX’s 19.8% stake in Blue Sky Meats, a Southland meat processor, was valued at $10.2 million.
However, related-party transactions continued to have a significant presence on the balance sheet, with Kereru Foods involved in $75.9 million worth of trading during the reporting period.
Job Cuts and WorkSafe Notices
BX Foods cut 75 jobs in August 2023, attributing the decision to tough trading conditions. Concurrently, WorkSafe New Zealand issued multiple improvement notices, one of which flagged the absence of a workplace health monitoring system.
A WorkSafe spokesperson noted that inspectors had “briefly visited the site that month and observed positive progress on how workers are engaged in health and safety matters.” They further added, “WorkSafe will revisit as required within our strategic focus on the manufacturing sector.”
BX Foods Works to Stabilise Operations and Rebuild Trust
Compared to meat industry leaders like Silver Fern Farms, Alliance Group, Affco, and Anzco, BX Foods remains a small player.
The company operates from a $5 million site purchased in 2014 from Lean Meats, a deal that was approved by the Overseas Investment Office. BX Foods is now focusing on stabilising its operations and restoring trust in the wake of internal disputes, with its 2024 financials still overdue.