Rural round-up

July 10, 2015

Former Fonterra boss Craig Norgate dies:

The former Fonterra boss, Craig Norgate has died. He was 50.

Mr Norgate had a spectacular rise in business, becoming head of New Zealand’s biggest company, Fonterra, at the age of 36. . .

$158,000 to protect Taranaki biodiversity:

Environment Minister Dr Nick Smith today announced a $158,000 Community Environment Fund grant for a project which aims to protect native birds and forest at Rotokare Scenic Reserve in South Taranaki.

“This funding will help support the work underway to ensure a ‘halo’ more than 2000 hectares in area surrounding the predator-proof fence of Rotokare Scenic Reserve. This funding will extend the successful work of the Rotokare Scenic Reserve Trust as well as neighbouring property owners and local councils to create a flourishing ecosystem in an area that was previously threatened by predators and land use change,” Dr Smith says. . .

ComCom to file court proceedings over price fixing – Suze Metherell:

(BusinessDesk) – The Commerce Commission intends to file court proceedings against PGG Wrightson, Elders New Zealand and Rural Livestock by the end of the month, claiming the three fixed fees charged during the implementation of a national livestock tagging scheme.

The consumer protection authority is investigating fees charged during the adoption of the National Animal Identification and Trading Act 2012, commonly known as NAIT. A spokesman for the commission confirmed it intends to file proceedings against the three agricultural companies and five undisclosed individuals before the end of this month. . .

Improvements sought for forestry scheme:

A review to increase uptake for the Permanent Forest Sink Initiative is underway and the government is seeking feedback from industry on the proposed changes, says Associate Primary Industries Minister Jo Goodhew.

Introduced in 2006, the Permanent Forest Sink Initiative was the first national scheme that allowed forest landowners to earn emissions units for the carbon stored within their forests. . .

More than one prize to aim for in South Island farming competition:

In addition to the top prize of a $20,000 travel fund, entrants in the 2015 Lincoln University Foundation’s South Island Farmer of the Year Competition will also be able to pitch for one of four special category prizes, with a cash prize of $5000 each.

Lincoln University Foundation Chairman Ben Todhunter said generous support from sponsors meant that the four prizes could again be offered this year, after their debut in the 2014 season. . .

Two Brands, Three Blokes, One New Wine Company:

Two renowned Marlborough wine brands are joining forces, with the backing of former employees.

Highfield and TerraVin Wines will now be known as Highfield TerraVin Ltd.

Winemakers Alistair Soper and Gordon Ritchie have joined with General Manager Pete Coldwell to run the new company, with all three men having some strong goals in mind. . .

 

Technology takes vineyard to the world:

One of New Zealand’s fastest growing and most innovative wine companies, Yealands Family Wines is taking its sustainability story to global markets via a leading edge, digital platform.

YealandsLive.co.nz features dynamic content captured via a series of live feeds, directly from the Yealands Estate Seaview Vineyard and Winery in Marlborough, New Zealand. The website aims to give consumers and the wine trade a unique, and authentic behind the scenes look at one of the world’s premier sustainable wine producers. . .

 

 


PGW’s loss SFF’s gain – again

August 31, 2011

PGG Wrightson’s misguided attempt to buy into Silver Fern Farms last year cost the rural servicing firm $40 million last year.

Another unfortunate deal with the meat company has cost PGW $9.6 million and made a major contribution to its $30.7m loss for the year to June.

In 2009, the company entered into a 10-year supply contract for livestock to Silver Fern Farms. To the extent that the company was unable to meet the annual agreed level of supply, in certain circumstances it was required to make a payment to SFF related to the shortfall.

Due to the level of supply and current livestock market trends, a provision of about $9.6 million had been made, representing the best estimate of PGGW’s expected liability for shortfall payments over the remaining contract term.

Stock agent’s are supposed to get the best deal for their clients. They can’t do that if the company they work for has tied itself to one meat company.

The huge loss of lambs after the snow storm last year combined with increased demand and much higher prices would have made it a difficult season for PGW anyway and the deal with SFF compounded its problems.

PGW’s loss has been SFF”s gain again.

SFF was on its knees before Craig Norgate led PGW’s merger bid. The penalty payments when that deal collapsed helped the meat company back into the black last year.

We’ll have to wait for SFF”s results to discover the importance of the amount PGW contributed to its bottom line this year.


Rural round up

November 27, 2010

Family’s living proof of sheep farming viability – Neal Wallace in the ODT writes:

Given the sheep industry’s well documented problems, labelling yourself specialist sheep farmers might not be considered the most inspiring of titles, but it is one the Alderton family wears with pride.

They are living proof sheep farmers can make money and be profitable by balancing business, animal and environmental factors.

The key, according to Ron Alderton, was attitude and determination.

Blunt chat puts station on new path – Jackie Harrigan in Country-Wide writes:

You would think it a brave man who told a new farmer-supplier with 30,000 lambs that his lambs weren’t really up to scratch.
That farmer might be tempted to tell the meat company to take a running jump – but to Ren Apatu, managing director of Ngamatea Station, 28,000ha of wild tussock and improved high-performance pastures on the Napier-Taihape road, the comment was a seminal moment.
“We thought we were pretty clever, with that number of lambs, but the meat company said, ‘If you give us lambs like last season we really don’t want them’ – and we really hadn’t heard that before,” Ren says.
Even more of a revelation was being taken into the chiller and shown his lambs on the hooks, next to those of other farmers.
“There were our lambs, about 16kg with a big fatty pack of meat on their rumps, hanging next to lambs at about 25kg with no fat on them.”
Being told “this is what we want and this is what you guys are giving us and if you want to be a part of it you need to supply what we want” was a wake-up call to Ren.
“We were told – ‘Our markets don’t want fat, they want meat; we want high yield as well – its good for us and for you’.” . .

Cleaning up afte Norgate may be expensive – Chalkie writes in The Press:

 Craig Norgate is well gone from PGG Wrightson, but tidying up some of the messes created during his tenure seems to be taking time – and may involve a reasonable bill.

Here’s what the progress card to date looks like:

1. New Zealand Farming Systems Uruguay exited – a good outcome, sold above book but below cost, with a bonus $4 million for the management contract and a $19.2m receivable debt owed to PGGW due to be settled.

2. Tim Miles, the former managing director put in place by Mr Norgate has been ejected – but at what cost?

3. Fixing up the half-cocked exit from the wool business and associated creative accounting – work in progress.

New chairman Sir John Anderson comes with one of the finest reputations in New Zealand business, and certainly there seems to be decisiveness around the board table in terms of the sudden and immediate resignation of Mr Miles, who was rightly or wrongly seen as Mr Norgate’s right-hand man.. .

 

Sustainability’s like ‘beauty’ – go on try and define it. Peter Kerr at Sciblogs writes:

Sustainability’s a term that’s a bit like ‘beauty’ – everyone knows what it is, but pinning down exactly what it is, is often in the eye of the beholder.

However, NZ agribusiness better start getting a better grip on the actuality of sustainability, or risk being marginalised by overseas customers and consumers according to KPMG.

In a recent agribusiness green paper KPMG lays out the current and emerging environment in our markets on the vexed issue of sustainability, with a second paper to focus on the practicalities of implementing such a supply chain approach.

The report contends that while the term has broad meaning, in essence it is about meeting the needs of today, without adversely impacting on the needs of tomorrow, and in balancing environmental, social and economic concerns in doing so. . .


Norgate’s last stand?

May 3, 2010

The Press (not online) reports that Craig Norgate has given up on Rural Portfolio Investments, the parent company of Rural Portfolio Capital:

Norgate has essentially thrown in the towel on Rural Portfolio Investments . . . saying he cannot raise enough funds for the next dividend on the $60m of preference shares.

It is unlikely the preference shareholders will get the face value of that $60m investment back in the short term and the market has already priced in a much lower return.

The security for the RPC preference shares is 46.76m PGG Wrightson shares (which closed at 53c yesterday) and 10m NZ Farming Systems Uruguay (NZFSU) shares (41c) was well as $742,314 held in a dividend escrow account. . .

RPI and its financing subsidiary Rural Portfolio Capital are the investment vehicles for Norgate and the Otago-based McConnon family, and will very likely be wound down. . .

Norgate contributed to the McConnon family fortune when, as general manager of Kiwi Dairy, he bought Mainland Products from them. He’s now taken a large chunk of that away through his encouragement for them to invest in PGW.

He thought he could capture the rural servicing market by amalgamating Williams and Kettle, Pyne Gould Guiness and Wrightson. But farmers never bought into his plans and the combined market share of those companies fell from more than 70% to less than 50%.  PGW’s share price went from around $2. 80  two years ago to just 53 cents on Friday.

The decline of PGW provided opportunities for competitors Combined Rural Traders and new companies of stock agents set up by former PGW agents, including Hazlett Rural and Rural Livestock.

The only positives for PGW at the moment are the arrivals of Sir John Anderson as chairman of the company and former PGG general manager George Gould as a director.

One of Norgate’s biggest mistake was failing to gain finance for the purchase of 50% of Silver Fern Farms. While the financial meltdown has been blamed for this many farmers cannot believe how he ignored the fundamental basics of business which require securing funding before doing a deal.

His foray into dairying in Uruguay was big on promises but has yet to deliver. Share prices peaked at $2 and were at 41 cents on Friday.

From the outside, the investment in Uruguay looked simple. However, Norgate failed to take full account the challenges of farming in South America with language, cultural and political difficulties and a very different climate from New Zealand.

You only have to look  at the difficulties New Zealand companies have when investing in Australia, where at least the language, culture, banking and legal systems are similar, to realise that what works so well here might not  transfer easily to Uruguay.


Great mag & grubby kids

September 16, 2009

Young Country, the rural magazine which was launched earlier this year, continues to impress.

dairy 10006

The current edition profiles Anna Smith, who’s working towards a PhD in animal genetics;  Michael Short, the 2009 Rural bachelor of the Year; Craig Norgate and six young people who’ve made agriculture their career.

There’s advice on dog handling and the story of Sue Arthur the cheese maker at Over the Moon.

The cover story on Tim O’Sullivan who won the National Bank Young Farmer title this year was written by Kate Rivtett-Taylor. Her blog post on Getting Dirty caught the attention of Jamie McKay who had a chat about it with her on the Farming Show.


Finalists announced for Fed Farmers’ Agribusiness Person of the Year

June 27, 2009

Federated Farmers have announced six finalists for its inaugural Agribusiness person of the year Award.

They are:

  • Tom Henderson, Champion of the Environmental Award winning Opuha Dam
  • Jeremy Moon, Managing Director, Icebreaker
  • Craig Norgate, Chairman PGG Wrightson
  • Dr. John Penno, Chief Executive Officer, Synlait
  • Sam Robinson, Chairperson, AgResearch
  • Ben Russell, General Manager for Rural New Zealand, Rabobank

The finalists will be judged by an independent panel and the winner announced at Feds’ national conference next weekend.

My vote goes to Tom Henderson. He’s a grassroots farmer who led the development of the Opuha irrigation scheme.

As a result of that, the positive agricultural, environmental and recreational impacts of the Opuha Dam have transformed South Canterbury and made a significant contribution to the national economy.


It could be a long wait

October 15, 2008

PGG Wrightson is waiting for confidence and stability to return to world equity markets so it can get the funding to enable it to take a 50% stake in SIlver Fern Farms.

Chairman of the rural servicing company, Craig Norgate, said banks were on side but equity markets were not yet stable enough to secure the $110 million needed for its required first instalment of the $220 million half share in the Dunedin meat company.

“We are still committed to making it happen in the manner approved by shareholders. It’s just not easy at the moment.”

He was not sure how long it would take to secure the funding, as that was out of his control.


%d bloggers like this: