Will Icebreaker VF deal get OIO tick?

November 4, 2017

Icebreaker, one of the company’s that made merino fashionable, is selling to a USA company  but the deal needs OIO approval:

US-based VF Corporation needs Overseas investment office approval to buy Kiwi merino clothing maker Icebreaker, meaning the deal is worth at least $100 million. The terms of the deal were not disclosed.

Merino producers have been getting a lot of pressure to sign up to 10-year contracts with Icebreaker. The proposed sale explains that and a good number of committed producers would have made the deal more attractive to the buyer.

VF Corporation has a market capitalization of around US$28 billion and its portfolio includes The North Face, Timberland, SmartWool, Vans, Wrangler and Lee. In its third-quarter result, the company forecast its 2017 revenue would be approximately US$12.1 billion.

Icebreaker had annual sales of $220 million, of which 86 percent were in offshore markets. Its own outlets and e-commerce sales make up 32 percent of sales, according to the company’s latest statement.

While the terms of the deal were not disclosed, Icebreaker confirmed the need for OIO approval due to the size of the transaction, implying a minimum value of at least $100 million. In a separate statement, VF said “the purchase price is not material to VF.” It also clarified that it expects the transaction to close in April 2018. . . 

I would think the deal would be worth considerably more than $100 million. Regardless of how much more, closure by next April is probably very optimistic.

Friends who have had dealings with the OIO, as sellers and buyers, said it was a very time-consuming process.

Unless it gets a straight decline from the outset, it won’t be any faster under the new government.

According to Icebreaker, the deal creates an expanded opportunity for the New Zealand merino industry. “This is a once in a lifetime opportunity for our global Icebreaker team and for our New Zealand wool suppliers to introduce a whole new universe of consumers to the benefits of sustainably farmed, ethically sourced, New Zealand Merino wool,” said Icebreaker founder Jeremy Moon.

John Brakenridge, CEO of the NZ Merino Company, noted VF have also had a long-term commitment to the New Zealand Merino industry through their investment in SmartWool and NZ Merino has worked with SmartWool in areas such as sustainability and social responsibility.

“Today we are seeing record demand and prices for New Zealand merino wool …the synergy of these two brands working as sisters from the same stable to build increased awareness of the Merino apparel category represents an exciting new development for the New Zealand merino wool industry,” he said. . . 

People tend to be less opposed to selling land to foreigners than selling companies.

But no matter who owns it the land and the business carried out on it stay here.

When a company is sold, there is no guarantee anything will stay in New Zealand.

Icebreaker is a New Zealand company and its clothing is designed here using locally grown merino wool but manufacturing has been done overseas for several years.

If the sale does go ahead, people who want New Zealand made merino will still have the choice of buying from companies like Glowing Sky and Mons Royale.

 


Rural round-up

August 22, 2016

 

Employment breaches ‘wake-up call’ for Marlborough wine industry – Oliver Lewis:

Widespread employment breaches have been unearthed by an investigation into labour contractors servicing the Marlborough wine industry.

Several labour contractors, who supply wine companies with workers, were found to have breached employment standards by failing to pay their workers minimum wage, holiday pay, or keep proper employment records.

The joint investigation, carried out by the Labour Inspectorate, Immigration New Zealand and Inland Revenue, involved random visits to 10 independent labour contractors around the region. . . 

Old school thinking stunts export gains – Andrea Fox:

New Zealand is stuck in the past figuring how to produce even more low-cost export commodities while the marketing of fine products it already has is “woeful”, says New Zealand Merino boss John Brakenridge.

“We sell commodities at an export value of around $37 billion that reach consumers globally at a value of over $200 billion,” says the chief executive credited with driving merino’s monumental shift from a nearly 100 per cent commodity sold at auction to 70 per cent grown under lucrative contracts to elite wool product makers.

Brakenridge’s call for New Zealand to dramatically lift its marketing and branding game follows another gathering at Stanford University, in the heart of Silicon Valley, of New Zealand’s primary sector “bootcamp”, the Te Hono Movement.  Te Hono, founded in 2012 by Brakenridge, says it has so far united 178 chief executives and leaders representing 80 per cent of the primary sector, in a goal to collaborate to transform New Zealand’s approach to doing business globally. It was Te Hono’s fifth workshop at Stanford, where participants work with professors at the world-leading research and new technology university and Silicon Valley business innovators.  . . 

Cashflow boost for Fonterra farmers – Dene Mackenzie:

Fonterra farmers have received a cashflow boost with confirmation of a further 10c per share payment of the co-operative’s 2015-16 40c forecast dividend.

The co-operative had already brought forward an earlier dividend payment during the last financial year.

Its intention was always to declare a further dividend in August, subject to financial performance supporting the forecast earnings per share range of 45c to 55c, chairman John Wilson said in a statement. . . 

North Otago surprised by early, strong arrivals :

Calves have arrived “early and strong” on North Otago dairy farms, Lyndon Strang says.

The Federated Farmers North Otago dairy section chairman said most farmers had started calving about five days ahead of schedule.

“That’s pretty much across the board.”

He could not determine the cause, but said it was going well and there was “plenty of feed available”. . . 

Proud Marlborough beekeeping firm faces challenges as century celebrated – Mike Watson:

Beekeepers are like any other farmers except they don’t have fences for keeping the stock in, says a Marlborough beekeeper celebrating 100 years of commercial honey making.

“At the end of the day, like any farmer, we need healthy stock to control pests and diseases,” said J Bush and Sons managing director Murray Bush.

“We do selective breeding programmes like the sheep and beef guys and we have similar concerns as they do. . .

Ethanol: bad for cars, bad for consumers, bad for the economy and really, really bad for the environment – Mark J, Perry:

An excerpt appears below from my op-ed in yesterday’s US News and World Report “Unwind the Ethanol Mandate” about one of the biggest political boondoggles in history – ethanol and the ethanol mandate. Back in 2007 when political cheerleaders like Sen. Chuck Grassley of Iowa (the “king of ethanol hype”) were promoting ethanol with fantastic claims like “Everything about ethanol is good, good, good,” Rolling Stone magazine responded with the best sentence on ethanol I’ve ever read: “This is not just hype — it’s dangerous, delusional bullshit.” And what’s notgood at all about demon ethanol (Paul Krugman’s phrase) are the serious negative effects it’s having on the environment: . . 


Rural round-up

October 17, 2015

Progressive Meats founder Craig Hickson wins entrepreneur of the year – John Anthony:

A Hastings businessman who started a meat processing company more than three decades ago has taken out New Zealand’s top entrepreneur award.

Progressive Meats founder Craig Hickson was selected from a field of six New Zealand entrepreneurs to be named EY Entrepreneur of the Year for 2015 at a dinner in Auckland on Thursday.

Hickson and his wife Penny started Progressive Meats in Hastings in 1981 with six staff working in a lamb processing facility.

The company now employs more than 300 staff and has processing facilities for lamb, beef, venison and rams. . .

Share register challenge for SFF – Dene Mackenzie:

Silver Fern Farms faces a new problem of how to manage its share register after the Dunedin meat company yesterday received overwhelming support for its joint venture with China’s Shanghai Maling.

The co-operative received 82% votes in favour of the proposal. Shanghai Maling, a listed company in China, will vote on the deal on October 30.

But with the Chinese Government-controlled Bright Food Group owning 38% of Shanghai Maling, and supporting the deal, the vote is expected to easily pass. . . 

TPPA will advance globalisation of agriculture, trade minister says – Gerald Piddock:

Trans-Pacific Partnership Agreement (TPPA) negotiations will trigger more liberalisation of world wide agricultural trade, says Trade Minister Tim Groser.

Once started, the trade process would be difficult to stop, Groser told journalists at the International Federation of Agricultural Journalists Congress in Hamilton.

“We are in my opinion…in the early stage of the globalisation of world agriculture,” he said.

However, he acknowledged that removing agricultural subsidies would be a difficult task for developed  countries. . . 

NZ Merino, on quest to add value to commodities, increases annual profit 21% – Tina Morrison:

(BusinessDesk) – New Zealand Merino Co, a wool marketer which aims to develop higher-value markets for sheep products, posted a 21 percent lift in full-year profit and said it’s on track to double the value of the business in the three years through 2016.

The Christchurch-based company said profit increased to $2.3 million in the year ended June 30, from $1.9 million in 2014, and $405,000 in 2013. Revenue fell 6.1 percent to $109.4 million from the year earlier, while cost of sales fell 7.7 percent to $98.4 million and expenses slid 4.2 percent to $12.8 million. It will pay shareholders, including 536 wool growers, a dividend of $1.2 million, up from $942,000 a year earlier. . . 

Americans are biggest investors in NZ dairy land:

United States investors were the largest investors in our dairy land during 2013-2014, analysis by KPMG has revealed.

In the report on Overseas Investment in New Zealand’s Dairy Land, KPMG has analysed Foreign Direct Investment (FID) decisions by the Overseas Investment Office (OIO) for the 2013-2014 period.

It shows that the US was the largest investor in dairy land during that two-year period – accounting for 54.4% of the freehold hectares sold, and 26.5% of the consideration paid. . .

Manuka honey lobby devises test to prove authenticity – Suze Metherell:

(BusinessDesk) – The UMF Honey Association says it has found the solution to fake manuka honey products, developing a portable device which tests for the nectar of Leptospermum Scoparium, the native manuka bush.

The manuka honey industry group, working with Analytica Laboratories and Comvita, presented the primary production select committee with a portable fluorescent test which can easily indicate whether a product is genuine manuka honey, and research defining the premium honey. Analytica executive director Terry Braggins said the development of a chemical fingerprint, based on the presence of the native bush’s nectar, could distinguish monofloral honey made by bees foraging on manuka flowers from other blended or imitation honey. . . 

 


Rural round-up

October 15, 2013

NZM’s innovation an award winner – Sally Rae:

Talk to New Zealand Merino Co chief executive John Brakenridge and there’s one word that keeps cropping up in conversation – innovation.

And it is that innovation that has seen both the company and Mr Brakenridge recognised at the New Zealand International Business Awards.

NZM won the AUT Business School award for most innovative business model in international business, while Mr Brakenridge was named KPMG leader for outstanding contribution to international business. . .

Learning from NZ farmers – Sally Rae:

Uruguayan farmers Francisco Arrosa and Jimena Popelka are looking forward to learning first-hand what their New Zealand counterparts do in a country they describe as a ”mecca of farming”.

Mr Arrosa and Ms Popelka are in New Zealand for this week’s Rotorua-based PGG Wrightson World Angus Forum.

The international four-yearly forum, which was last hosted in New Zealand more than 30 years ago, is also celebrating the 150th anniversary of the introduction of the breed to New Zealand. . . .

Dog club, district documented – Sally Rae:

A new book marking 100 years of the Waimate Sheep Dog Trial Club is ”more than just a story about a club”.

A Noble Pursuit, by Waimate author and historian John Foley, in collaboration with Judith Hayward, of Timaru, not only tells the story of the club since its establishment in 1912 but also that of the Waimate district.

In launching the book in Waimate last week, Federated Farmers vice-president William Rolleston said it was a reminder of ”enormous” changes in technology. . .

Biggest geranium, fuschia nursery in country – Yvonne O’Hara:

arry Hayes grows colour.

He owns Hayes Wholesale Nurseries and is one of the biggest wholesale growers and suppliers of petunias, Pac geraniums, fuchsias and Pac perlagoniums in New Zealand, and sells to local garden centres as well as national chains throughout the country.

The Makarewa-based nurseryman first became interested in the business when he worked for his parents who owned a garden centre. . .


Rural round-up

August 19, 2012

First product off the line at Fonterra Darfield:

The first bags of whole milk powder have rolled off the production line at Fonterra’s new $200 million manufacturing site near Darfield in Canterbury and are bound for South East Asia, China and the Middle East.

Brent Taylor, our Director of Operations – NZ Milk, says it was smooth running for the new plant, which produced 40 metric tonnes of product in its first full day of operations.

“It has taken less than two years to bring the project together and it is a significant achievement for us and good news for Canterbury and the wider Christchurch rebuild, he says. . .

Tree Harvesting Invention Named New Zealand Winner of the James Dyson Award :

A tree harvesting device has won the New Zealand leg of the twelfth annual James Dyson Award, a product design competition.

Current harvesting methods require return visits to a forest, causing soil erosion and damage to surrounding trees. Nick Ross, an industrial design graduate from Massey University, has devised a solution that cuts trees right from ground level, and feeds them straight into the machine. An extraction process is then engaged to return needles back to the soil for nutrients, while the branches gathered in a separate container can be re-used as an alternative energy fuel. . .

Meanwhile in the asylum – Offsetting Behaviour:

I like to think of New Zealand as being the Outside of the Asylum.

Outside of the Asylum, farmers are free to sell their produce.

Today’s news from inside the asylum: hosting a 10 year old’s birthday party and selling a bit of farm produce at the event
hosted on your farm gets you thousands of dollars in fines
. . .

Gibbston Valley Winery celebrates two special ‘birthdays’

A Central Otago winery celebrating its 25th commercial grape harvest with a black tie dinner next month will also mark a milestone of a different kind.

The Gibbston Valley Winery anniversary dinner event on September 1 will kick start the award-winning winery’s support of national charity Cure Kids, with all proceeds from the night’s auctions going to the charity.

In keeping with that support, the dinner will also celebrate the remarkable story of Cure Kids ambassador and Queenstown resident Sophie Newbold, who celebrates her 18th birthday on September 14. . .

Boot camp to inspire development of New Zealand Inc – Allan Barber:

This week a high powered Boot Camp, attended by a group of key New Zealand agribusiness executives, will take place at Stanford University, California, with facilitation by Professor of Marketing Baba Shiv whose research expertise is in neuroeconomics.

The Boot Camp is the brainchild of Keith Cooper from Silver Fern Farms and John Brakenridge, Chief Executive of NZ Merino, who visited Stanford to discover new ideas on how to market Silere lamb from the two companies’ JV established last year with assistance from the Primary Growth Partnership fund. . .


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