Loss from Alliance pool of talent

Alliance Group's Pukeuri Freezing Works. Photo by Stephen Jaquiery.
Alliance Group's Pukeuri Freezing Works. Photo by Stephen Jaquiery.
Earlier this week, Owen Poole officially retired as chairman and as a director of Southland-based Alliance Group. The straight-talking meat industry veteran talks to agribusiness reporter Sally Rae about his lengthy tenure in the red-meat sector.

Owen Poole might have called time on his involvement with the meat industry but he will continue to observe it with interest from his Wanaka home.

For after an involvement spanning five decades, beginning as an office boy and ending as chairman of the world's largest processor and exporter of sheep meat, it is not easy to completely log off.

''This industry draws you in. It's hard to get it out of your system. You lie awake when you should be sleeping, thinking: 'How can I make this better?' Being chairman of a farmer-owned co-operative like Alliance Group, with its 5000 shareholders, was a big task. For one, it required more engagement with shareholders than being chairman of a listed company.

''Farmers felt they had the ability to pick up the phone and ring me. They own the company, they feel part of it and they want their voice heard. That's not a bad thing, as most of their income is generated from transacting with the company.

''I won't miss the phone ringing, I won't miss the emails. You let it go but you'll never forget the fact you were part of it,'' he said.

Born in Riverton, in Southland, and from a non-farming background, Mr Poole (66) had always planned to be a soldier. But when his dream was dashed when he failed the medical test due to allergies, he joined ''a different army'' - the meat industry.

Fresh from leaving school, he started work in the office at Southland Frozen Meat in Invercargill, where he described the early years as ''tuition by exposure''.

He was back and forward from the company's corporate office and its Makarewa plant, moving through the different divisions and rising through the ranks to eventually become chief executive in 1984.

But when the company was taken over by Challenge Meats, a division of Fletcher Challenge, a disagreement in principle over strategy triggered his resignation the following year.

He and his family moved to Wanaka, where they already had a holiday home, and bought a bookshop - about as far removed from the meat industry as you could get.

After a five-year hiatus, Mr Poole received a phone call from Alliance's then chief executive Sandy Murdoch.

Southland Frozen Meat and Challenge Meats had morphed into Waitaki; Alliance had taken over the South Island assets of Waitaki and it had also recently taken over local meat processing company C. S. Stevens Ltd.

Mr Murdoch wanted him to lead weekly meetings to enable the merger. The position was for three days a week, for three months.

''I'm a bit slow. It took me 15 years full-time,'' Mr Poole quipped. It was not an easy time. The company was in financial strife and needed to be reconfigured, rationalised and recapitalised, so difficult decisions had to be made.

The high point of his tenure with the company - he spent five years as chief operating officer and then 10 years as chief executive - was recovering from a ''pretty precarious'' financial position in the early 1990s.

''We were in reasonably dire straits, unloved by the world really, banks, shareholders, employees. We had to do tough stuff,'' he recalled.

The low point was making ''thousands'' of people redundant and the impact, both financially and in human terms, of that.

In retrospect, the plan was robust and the only way to go. But the implications were far-reaching.

Owen Poole
Owen Poole
''You certainly feel it ... it's one of the things you carry with you. You're mindful of what you've done to people's lives,'' he said.

More recently, there had been the closure of Alliance's Sockburn plant in Christchurch and the shifting of sheep processing from Mataura to Lorneville, with subsequent effects on employees.

But the flip side of that was expansion of both sheep meat and beef processing in the North Island, the doubling of beef capacity at Mataura and a third shift at Pukeuri.

Mr Poole spent a decade as chief executive of Alliance Group before retiring in 2005.

''It was time. Ten years was enough for me, enough for the company.

''We had good people coming through, they were ready. We had a good executive team there - because it isn't about one person. I felt it was time for me to do other things,'' he said.

It was ''circumstances'' that unusually brought him back in 2008, this time in a governance position as an independent director, and subsequently chairman.

Things had got ''reasonably traumatic''. The previous chairman John Turner and another senior director, Murray Taggart, had been dumped by shareholders in a backlash against low lamb prices, and the approach was made for him to join the board.

Asked whether it was difficult to make the transition from chief executive to chairman, he acknowledged it was very different. He was always very aware the role of governance was very different from that of management.

''It's difficult, once you have had your arms in it, to stand back in a governance role. I was very conscious of that,'' he said.

A highlight during his time at Alliance included the company's large investment into innovation to ''help farmers lift the game''.

Such projects included the central progeny test, yield grading, environmental management and environmental energy projects, commercial DNA test development, research into lamb performance and meat quality, the continuing development of Hoofprint (a system for farmers to calculate their carbon footprint), proof of origin and the deer progeny test.

Challenges in the meat industry were nothing new. They had existed since its inception 130 years ago, he said.

During his time as chairman, there had been snowstorms and drought in the company's supplier catchments, changing land use, a world economic crisis and a higher New Zealand dollar.

Those events had been ''testing'' for the company's directors and management.

Changing land use and shrinking livestock numbers, particularly sheep, was not unique to New Zealand, but was rather a worldwide phenomenon. Even the ''massive flocks'' of Asia were shrinking.

But along with shrinking supply was a growing affluence. Consumers were spending more money on meat protein as GDP per capita increased.

Growing affluence and increased consumption should ultimately lead to less volatility and a higher pricing structure, he said.

The degree of diversity of markets, in recent history, was unprecedented.

While the focus was now on China, Alliance Group had been there for 20 years. The company was also now embarking on a second-year programme exporting lamb to Brazil, tentative steps had been made in India and there were also ''significant opportunities'' in other regions, including the Middle East and Eastern Europe.

It was well positioned in traditional markets, like Europe and North America, but was reducing its high reliance on those.

In recent times, the state of New Zealand's red meat industry has been a topic of discussion and debate.

In March this year, 1000 farmers gathered in Gore to overwhelmingly support a mandate for radical change.

That was followed by meetings throughout the country and the formation of the Meat Industry Excellence Group, which is pushing for reform. Last week, chairman Richard Young acknowledged finding the solutions to implement change was still the major barrier in reaching the group's goals.

Mr Poole understood the frustrations of farmers but, as owners of about half the industry, they needed to have some confidence in the people managing it on their behalf.

''There's good people involved in these companies. It's a challenging and difficult business,'' Mr Poole said.

There were assumptions that ''nothing's happening'' but there was a lot happening in the industry, including more market diversity and processing efficiency.

There was ''no one silver bullet''. Rather, there was a whole suite of things that needed to happen, including farmers supporting one company.

For the Meat Industry Excellence group and its predecessor Meat Industry Action Group ''to find a silver bullet'' when everyone else, including international consulting firms, had failed, seemed ''somewhat optimistic''.

''They certainly won't do it in isolation,'' he said.

Since the announcement of his retirement, Mr Poole had received calls from farmers, many of whom understood it was ''a difficult world''.

Good sheep meat farmers, as long as they had scale, were doing well, even last year with the lower pricing.

''I've asked farmers: Can you show me a sheep meat farmer in the world, that's not subsidised, that banks more money than you do?'' Mr Poole said.

For the past two years, he believed New Zealand farmers, on average, probably received between 50c and $1 per kg more than their Australian counterparts, in adjusted currency terms.

The story of New Zealand's sheep industry - from the massive gains in productivity, technology being applied in the sector and development of new market destinations - was a ''wonderful story'', but during periods of volatility and lower pricing, no-one wanted to hear it.

Asked whether there was a sense of unfinished business, Mr Poole said: ''There's always unfinished business. It doesn't matter when you go. There was unfinished business when I left as chief executive, as well. That's the way it's always going to be.''

But he did acknowledge he was disappointed ''we couldn't have come to some arrangement within the industry to support a better model''.

Some progress has been made but it was ''not going to happen any time soon''.

''Is that disappointing? Yes, I'd hoped for a better result,'' he said.

Mr Poole's intention to retire had been well signalled. He indicated to directors in June 2011 his intention to retire in December 2012, but then the company ''hadn't had a great year'' - reporting its first operating loss in 20 years in 2012 - and it was in the midst of major restructuring and alignment of its operations, so he agreed to extend his tenure for a further year.

His successor, North Canterbury farmer Murray Taggart, has ''sat around the board table for a number of years''.

''He knows exactly where the company's at and where it's going.''

Mr Taggart, who farms a 457ha irrigated sheep and cropping property at Oxford, was a farmer-elected director from 2002 to 2007, and was re-elected to the board in 2010. While there would be a difference in style with Mr Taggart's leadership, there should not be much of a difference in direction, Mr Poole said.

His plans are, first, to take his wife Ingrid on a delayed ''winter'' holiday.

Then he intended spending more time with family, doing some more travel and digging out his fishing rods that had been underused.

''I can be as busy as I want to be. Or not,'' he said.

- sally.rae@odt.co.nz

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