Wednesday, July 6, 2022

Robotic dairy unit making good progress

Scott Technology says it is getting continuous improvement in the prototype robotic dairy milking unit in South Canterbury and expects first sales to occur in the next financial year. This will follow further sales of automated lamb meat processing units, with two major deliveries to buyers in Melbourne and South Australia by the end of this calendar year, providing revenue of about $11 million, and sales of smaller, stand-alone beef-processing equipment.

The ALC plant in Melbourne is expanding on a $4m X-ray-primal cuts system installed by Scott Technology in late 2011.

The robotic dairy unit, installed on a Rangitata farm in December, is not yet operating at the level the company is seeking but managing director Chris Hopkins expects increases in its robustness and reliability over the year.

Another two or three prototypes are due to be installed on other South Canterbury farms over the next several months.

Scott Technology is a 61% shareholder in the Scott MilkTech joint venture that is developing the project, with partner MilkTech owned by a group of dairy farmers.

The unit uses a 3D-camera to robotically fit the four milking cups on the cow.

Hopkins expects to be taking orders later this year for delivery next year, probably in the second half of the year ending August 31.

The unit is designed for large herds of more than 500 cows and a major selling point is it can be retrofitted to existing 50-bale rotary units without a great deal of modification work.

Scott MilkTech has already had interest from potential buyers in New Zealand and overseas and Hopkins expects the unit to become a significant revenue earner for the group.

No income from the dairy development project was included in the Scott Technology earnings for the six months ended February 28. The after-tax profit was $2.96 million on sales of $26.8m. In the same period a year earlier, the profit was $2.8m on sales of $29.3m.

Scott has a half share in the meat-processing business Robotic Technologies Ltd (RTL), developed in tandem with Silver Fern Farms. Most of the development work is done at Silver Fern’s Finegand plant in South Otago, which has a fully automated boning room and is a demonstration site for potential customers.

Scott’s share of RTL profit for the February 28 half year was $56,000, down from $124,000 at the same time a year earlier. The carrying value of the investment was $404,000 at balance date, up from $314,000 last year.

Scott Technology guarantees an RTL loan from the Bank of New Zealand, which was $359,000 at balance date.

Scott was in a strong financial position, with no term debt and an equity ratio of 80% at balance date.

The company is active across all its operating units, including the traditional whiteware manufacturing lines business. Two major shipments have just been made to the United States and orders from the US and China are keeping the Christchurch and Dunedin plants busy.

Shareholders on the register after Wednesday will receive a 2.5c a share dividend, with full tax credits, on April 23.

Scott shares were trading at $2.36 at time of writing.

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