Agri-lab Model Farm

April 2018

A business based on the by-products of animal processing buys a farm for a Hawke's Bay businesswoman

Award winning businesswoman Angela Payne has created an innovative business using offal waste streams. The success of Agri-lab enabled Angela to invest in a residential rental property portfolio (22 properties). The growth and success of the rental property enabled her to buy various small lifestyle bare land blocks and add an additional 64ha “model” farm.

The farm showcases New Zealand farming and the production of the animals that provide Agri-lab their raw materials. It is a vital part of the ‘story’ that Agri-lab’s international cliental are seeking to utilize within their product marketing.

Agri-lab processes about 120 tonnes of raw animal by-product a year for special orders from pharmaceutical and nutraceutical companies needing specialised tissues, placenta, offal, organs and dissected glands. The plant is equipped with freezers, freeze-driers and fermentation kettles, allowing delivery of product to meet client specifications.

Uses for each tissue type are varied - dissected glands, such as thyroid and pituitary glands from brains, are used for hormone extraction by pharmaceutical companies. Freeze dried pancreas is used in digestive aids, eye components and foetal eyeballs are used to treat macular degeneration and pericardium products are used for medical stents. As well, science facilities request various tissues for their research.

Agri-Lab is the world’s largest processor of placenta. Since 2004, placenta sales have become a key product making up half of all sales and, thanks to celebrities (such as Victoria Beckham and Simon Cowell) using the end products, it’s also what they’ve become most famous for. But sheep placenta for the cosmetic industry is only a small percentage of overall sales. The majority is sold for dietary supplements. As well, different components of brain and eye tissue go into drugs to treat degenerative disorders such as multiple sclerosis and Alzheimer's disease.

While the majority of raw material is sourced from meat works, registration and a detailed risk management plan worked through with MPI have enabled farm collection of placenta.

Angela says she operates in a spot market but the demand for different by-products continues to surge, with Agri-lab having again reached capacity at the present plant, although there is room for growth by using off-season or after-hours capacity. It is currently as big as Angela wants it to be, and further significant growth and expansion will be the domain of “the next owner”.

A former veterinary nurse, Angela settled in Waipukurau and was looking for business opportunities. Angela said she did not dare to dream that she might own her own farm but liked the idea of farm management, although was realistic as she grew up in a time when women were not valued as farm managers.

Using her veterinary background, she worked various contracts and was involved in feasibility studies at meat works where the chance to add value to waste streams was still relatively unexploited. During this time, companies wanting various offal and animal by-products for their research and/or production of cosmetics, pharmaceuticals and nutraceuticals contacted meat works for their raw materials.

Meat works often didn’t have the capacity for these small jobs, or the people power required made them uneconomic. Angela took on some smaller contracts – such as a Swiss Research institute wanting 20 bovine brains – 10 adult and 10 calf, all traceable from source. This labour intensive work involved literally catching brains as they headed down an offal chute (while animals are traceable throughout meat works, when waste and offal is separated out, traceability is often gone).

From these small contracts (that were often of little value to meat works) Angela began Agri-lab Co-Products in 1999, initially renting space at the local meat works.

Angela’s training not only gave her the stomach for the ‘blood and gore’ but also the confidence and know-how in regards to animal physiology and anatomy. She further sought knowledge and upskilled her dissection technique with help from veterinary practitioners at Massey University. Angela’s work at various meat works also equipped her with important knowledge for product sourcing. Various systems and layouts mean different works are able to supply some animal parts and unable to supply others.

The escalating demand meant a purpose-built plant became vital for business growth. The demand came from a worldwide surge in consumer demand for natural, chemical-free products. New Zealand with its ‘clean green’ image and healthy farm animals was an obvious source for pharmaceutical and nutraceutical companies to look to.

Between 2002 and 2004 Angela completed the work to register for and manage on-farm collection of placentas. Placenta collection from live animals requires that they are antibiotic free and collection areas are free from any contamination and 1080 and have well managed vermin control in place. Further testing of drenches was carried out to assure this was not impacting the end placenta products. 

Today, Agri-lab has strong relationships with around 60 farms that supply fresh placenta. Many are from horse studs (where placenta collection is viable due to the close supervision of birthing mares). Lamb placenta is predominantly collected from hot-wired set-ups in the South Island – hill country collection would be uneconomic.

In 2013, the business had grown to a $1.32 million dollar turn over and Angela was awarded a Rural Woman New Zealand Agri-Business award.

Not one to rest on her laurels, Angela attended an owner/manager programme at the Icehouse (founded by the University of Auckland Business School) in 2014. The course was pivotal and she embraced monitoring, measuring and KPIs.

Implementing what she’d learned allowed her to streamline Agri-lab by identifying low-performing product streams, and while revenue dropped, profits went up. Today with her present plant at nowhere near full capacity, the business is turning over about 2.5 million. She says it is enough for her, and the rest is for the next person. Further revenue is being added with the dry-hire of the food and medical grade facilities, and contract freeze drying of fruit and vegetable for third parties.

In 2016 Angela added a 64ha beef farm to her portfolio. She was regularly arranging farm visits for international clients to view New Zealand farming practices. Her client-driven demand for best practice on farm and the importance of the ‘story’ for their end consumer made her own small farm a valuable component of the company. The farm allows Angela to control production and ensure her clients see good practices while allowing them easy access to a picturesque farm for photography for their own marketing requirements.

Asked for the key to her business success, Angela concedes she breaks many of the rules. She highlights her ‘short chain of command’ and her avoidance of a board of directors that means she can make decisions easily and act quickly. She laughs, “she’s not great partnership material”.

But she does seek good advice relying on trusted professionals, accountants and lawyers. She has also been careful to not “over-stretch”, sticking to what her asset base can afford in terms of expansion.

Angela is a breath of fresh air in a time when business people are rewarded for the “more, more, more” ethos. She is committed to a low stress lifestyle for both her and her animals. She says this keeps her head clear and she is better equipped to make smart decisions. Further, she always asks and checks herself, “Am I happy, am I enjoying this, and are the bills paid? Enough is enough”.

In late January 2018 Angela takes ownership of a second 115ha farm – fully realising a dream she barely allowed herself as a younger woman – farm ownership and the “pleasure” of farming. Angela remains determined to maintain a healthy lifestyle/work balance with time for her horse trekking and hare hunting. Agri-lab is presently on the market.