PPCS should pull finger and push for industry merger
April 18th, 2008, 7:52 pm Hobbies News
Eion Garden, same newsletter: %26quot;Notwithstanding our support for the concept of a combined model, your board and management will continue to implement initiatives which will drive down processing costs and to capture more value from the market. We cannot rely on pan industry structures to deliver profitability.%26quot;
Same chap, same newsletter: %26quot;Thank you for your ongoing support.%26quot; Let me simplify this: %26quot;We dont really want anything to do with a merger, we want to carry on with what we have always done, thanks for agreeing with us.%26quot; %26mdash; Graham Butcher, The Southland Times.
In the meantime, we have $7.30/kg milk solids, and room for improving, which will accelerate the decline in sheep numbers making it even more difficult for processing companies.
I have to congratulate dairy farmers for creating the environment they currently enjoy.
It was the dairy farmers who supported and drove the creation of Fonterra and they deserve the rewards.
Sheep and beef farmers deserve the same business environment and rewards but its going to take even more resolve now to create it because at least one key player has got the pip.
The solution is for PPCS shareholders to make it clear to their directors and chairman what their expectations are.
I would like to think that expectation is for more active support to move the concept of a single entity along. I would have thought this was a clear message at the last round of director elections, but apparently not.
Lets talk about %26quot;compelling business%26quot; concepts %26mdash; co-ordinated marketing, efficient procurement, market development and last, but by no means least, product development.
There have been several estimates done of the value of all this in year 1 alone %26mdash; ranging from about $15 to $20 a lamb.
Thats certainly worthwhile and the benefits should continue to grow because the industry will be acting in a co-ordinated way to make sure that growth occurs.
Thats all fairly compelling, I would have thought.
Can we create a compelling business case without commitment of funds and management time? I think not.
Get on the phone and let your directors know what is expected of them.
Time is short.
Passively watching whats happening will not secure your future.
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