Multi-million insurance settlement for Edendale site

Mercer Group and its insurers have settled all potential claims associated with the collapse of a silo at Fonterra’s Edendale site in 2016.

Terms of the full settlement are confidential, Mercer said in a market announcement. However, the stainless steel products manufacturer noted it will pay Fonterra $1 million and undertake $3 million of work over a three year period at a discounted rate.

“Mercer is agreeing to the above without any admission of liability to Fonterra or any other party,” it added. “Mercer is pleased to be able to put this matter behind it, while at the same time retaining a strong working relationship with Fonterra.”

Fonterra’s raw milk silo in Edendale, Southland was designed and built by Mercer. In November 2017, Mercer reportedly revealed that the estimated cost of the collapse was $20 million.

Last month, Mercer Group announced a return to profit with a 10% increase in consolidated group revenue to $18 million for the six months ending December 31, 2018. The revenue growth was driven by H&C, which saw a 49% increase from the prior year to $9.3 million. Meanwhile, Mercer Stainless revenue was down 16% to $8.9 million.