Professor Keith's perspective
https://www.interest.co.nz/rural-new...wn-demise-sale
Interesting stuff.
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Professor Keith's perspective
https://www.interest.co.nz/rural-new...wn-demise-sale
Interesting stuff.
There is another dairy company following the same path which only survives because of its size.
IMHO farmers should not be in charge of their own marketing company or any company that processes their milk, they are very good at producing milk/farming/developing land but they are driven by tax free capital gains and do not see or understand the big picture of business. IMO no more than 70 - 75% of milk returns should be paid out to them the balance should be kept inside the company to reinvest in worthwhile opportunities that are dairy related that come their way ( I know of two such opportunities that F has ignored to its peril ), other uses of reserves should be used as income smoothing mechanisms in down years , not to be confused with farmer subsidies and marketing opportunities.
So what’s wrong with this country?
Since refrigerated shipping arrived in the late 19th century, New Zealand has been growing and exporting food and agricultural produce. It’s been what the country does, it's been where it makes it’s money for well over a century. But are the nation’s backbone industries accessible to the average private investor?
In the 21st century, the only primary sector business plan seems to be to sell up to overseas buyers. Just about everything you can think of - from forests to fruit juice to meat works to wine to dairy farms to retail butchers to wool scourers - all gone from the ever-shrinking local investment market.
And when the rare opportunities have presented themselves, New Zealanders have proved themselves almost unanimously unwilling to take advantage of those opportunities.
I’m beginning to think that New Zealand is a nation full of people who just can’t see past residential mortgage property, but who will still whine whenever anybody from outside is prepared to put their money where their mouth is when it comes to investing in the nations agricultural backbone.
You might be forgiven for thinking that New Zealand's most successful export has been talented people
[\rant]
Take the easy tax-free (until now) gains, leverage off equity of their house, have a focus on the short term, have a maxim of property always goes up/never lose money on property vs long-term, strategic thinking with less tax incentives. NZ company's generally have a record of poor results/lack of execution overseas, and in the primary produce arena, struggle to build any brand of scale - or at least don't have the profitability or reach to do so. Typically then won't invest in branding, where as primary sector supply behavior in NZ is often driven by who pays that 5 or 10 cents more - short-termist.
Farmer S Hers voted 90% for sale today.
Thanks. So badly managed by people who are rewarding themselves with big bonuses for selling it.
"Westland Milk Products chief executive Toni Brendish has been criticised for a "huge conflict of interest" over a $680,000 bonus if the co-operative is sold to Chinese company, Yili.Bonuses will also be paid to other top management including $360,000 to its chief operating officer, $302,700 to its general sales manager and $100,000 to its chief financial officer.
Otago University senior accountancy lecturer Dr Helen Roberts said it appeared Yili was willing to pay the management to encourage farmers to sell their assets, raising a conflict of interest."
And below.
"Westland also lost a huge opportunity in 2009, when, following the tragic death of CEO Scott Eglinton, the new CEO reversed the policy of moving to A2.
A sale will be a fantastic result for shareholders and the West Coast.
The dairy farmers will have a guaranteed priced for years and will be able to reduce their debt.
The new owners have the money to develop the company.