Silver Fern Farms

Silver Fern Farms Limited

Type	Cooperative
Industry	Manufacturing, Food, livestock marketing & supply, Agribusiness
Founded	30 September 1948[1]
Headquarters	Dunedin, New Zealand
Products	Meat
Revenue	NZ$2309m (2013-14)[2]
Operating income	NZ$2320m (2013-14)[2]
Profit	NZ$0.474m (2013-14)[2]
Total assets	NZ$760m (2013-14)[2]
Total equity	NZ$319m (2013-14)[2]
Subsidiaries	Silver Fern (brand)
Slogan	We go to great lengths so you don't have to.
Website	silverfernfarms.co.nz

Silver Fern Farms Limited is a New Zealand multinational meat co-operative owned by 16,000 New Zealand sheep, cattle and deer farmers.^[2] The company is New Zealand’s largest livestock processing and marketing company. It has investments in manufacturing, meat processing, transport of live stock, export logistics and meat marketing, with associated companies including NZ Lamb Group, New Zealand and Australian Lamb Company Limited, The Lamb Co-Operative, Inc, Robotic Technologies Limited, Livestock Logistics Nationwide Limited. Farm Brands Limited, Kotahi Logistics LP, Ovine Automation Limited, and Alpine Origin Merino Limited.^[2]

History

It was established in 1948 as the Primary Producers Cooperative Society based initially in the South Island of New Zealand as a meat marketing cooperative, predominantly of sheep. It became known as PPCS Limited but remained a minor player in the meat industry until the early 1970s when a new management team was appointed. The removal of subsidies to farmers, the New Zealand Meat Board ceding its monopoly on sheepmeat marketing, and meat processing industry over-capacity gave the cooperative opportunities to utilise its profitability built up over the previous decade. So in the 1980s it expanded from only minor processing operations by taking over meat processing cooperatives and companies in initially the South Island and later the North Island. In 1986 released asset value was returned to the farmer shareholders by the creation of a holding company Apex Limited. Apex was a vehicle that allowed the acquisition of Canterbury Frozen Meat.^[3] Major consolidation of the New Zealand meat industry continued through the 1990s with PPCS actively involved but not getting caught out like competitors such as AFFCO Holdings.^[3] However, in 2006 it was forced to take over Hawkes Bay based Richmond Meats to resolve issues resulting from a secret investment that had commenced in the late 1990s. This saddled the cooperative with debt. It was renamed Silver Fern Farms in 2008 based upon one of its long standing brands. A takeover by PGG Wrightson fell through due to the 2008 financial crisis. In June 2008, PGG Wrightson had made an unconditional offer to buy half of Silver Fern Farms for NZ$220 million, but in September was unable to complete the equity raising required to finance the offer and defaulted.^[4] It had to pay $42 million in compensation to Silver Fern and wrote off a total of $50 million for the compensation and due diligence costs.^[5] By 2013 the cooperative had accumulated significant losses leading to a company restructuring.^[6] The company is currently just profitable.

Re-organisation

On 1 October 2014, Silver Fern Farms Limited reorganised the business into three species-based units, creating two new 100% subsidiaries, Silver Fern Farms Beef Ltd and Silver Fern Farms Venison Ltd.^[2]

External investment

On Friday October 16, 2015, Silver Fern Farms accepted a 50/50 partnership proposal for an investment of NZD $261M with a subsidiary of Bright Food Group, Shanghai Maling.^[7] The full transaction which is subject to New Zealand and Chinese regulatory approvals is expected to complete in the middle of 2016.

Key brands

• Silver Fern
• Silver Fern Farms Premier Selection
• Silere (alpine origin merino)
• Grass-fed Premier Selection Reserve (beef)

Processing plants

As well as twenty directly owned processing plants in New Zealand as of 2014 the cooperative has investments both in New Zealand and overseas in other packing and processing plants and their technology. It will also process its farmers' produce with other processors.

References

1. "Silver Fern Farms Limited (149713) -- Companies Office". Ministry of Business, Innovation and Employment. Retrieved 21 February 2015.
2. "Silver Fern Farms Annual Report 2014" (PDF). Retrieved 21 February 2015.
3. "Meat Wars". Retrieved 21 February 2015.
4. "Craig Norgate steps down as chairman of PGG Wrightson". 23 July 2009.
5. Hembry, Owen (8 May 2010). "The rise and fall, and rise and fall of Norgate". The New Zealand Herald. Retrieved 4 May 2010.
6. "The restructuring of Silver Fern Farms". Retrieved 21 February 2015.
7. "Proposed investment by Shanghai Maling Aquarius Co., Ltd (Shanghai Maling)" (PDF). Retrieved 5 December 2015.