Silver Fern Farms has found a replacement logistics and marketing partner after last year's failed deal with PGG Wrightson, putting its integrated supply chain back on track.
The meat co-operative is merging livestock and marketing staff from the North Island genetics company Rissington into Silver Fern Farms (SFF), to provide advice and knowledge to lamb suppliers wanting to produce lamb to SFF's contract specifications.
Chief executive Keith Cooper said the deal did not involve Rissington Breedline, which developed sheep and cattle genetics.
Under the agreement, Rissington appears to be a replacement for PGG Wrightson, with the Rissington livestock and marketing staff having a similar advisory role to that proposed by PGG Wrightson.
Mr Cooper used the analogy for the relationship of someone buying a computer and the manufacturer having a support desk to help purchasers use the equipmentLast year's proposed merger with PGG Wrightson and the farm production skill and knowledge their staff was to have brought, was seen as crucial to SFF's integrated plate-to-pasture programme of supplying livestock to specifications required by customers.
The merger was to take effect from June, and as part of the agreement Mr Cooper said SFF would continue to develop yield-based payment and encourage on-farm productivity.
The two companies have had a working relationship for several years, with SFF processing lambs for Marks and Spencer contracts.
SFF has also revealed more details about a possible new share structure to attract new capital.
Traditionally, co-operatives have required suppliers to own a capped number of shares on a $1-in $1-out basis.
But, in a newsletter to suppliers, the SFF board said it favoured an annual equity value share issue to raise capital, similar to that proposed for the failed partnership with PGG Wrightson.
Under that proposal, suppliers could convert rebate and supplier investment shares to a new class of share, a supplier share, which would have a value reflecting the underlying value of the business.
The meat producer and exporter announced earlier this year that it sought an unspecified amount of new capital to fund business investment, to underpin the launch of a new consumer brand marketing strategy and to insulate the company from the current international credit crunch.
The SFF board was also investigating reducing the size of its board from 11 members.
