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Livestock Improvement freed from legislative shackles following database transfer

Livestock Improvement Corp [NZAX: LIC], which provides testing and artificial breeding services to the dairy industry, has been freed from legislative constraints on changing its constitution or demutualising following the transfer of its core database to DairyNZ.

The restrictions had been put in place because LIC, as it is known, held a genetics data base on the entire New Zealand dairy herd. In 2012, LIC and DairyNZ agreed to the transfer of the database to the Dairy Industry Good Animal Database to be run by DairyNZ, an industry group for New Zealand dairy farmers. Under the rules, LIC had to get consent from the Minister for Primary Industries to change its constitution or demutualise.

Chief executive Wayne McNee told BusinessDesk there were no plans to change the cooperative but the new freedom would help the company achieve its target of reaching $1 billion of revenue by 2025. It plans to do this through a combination of organic growth, expanding overseas and through acquisitions.

LIC had no need to publicly raise any capital for acquisitions because it carried no long-term debt and had "significant seed funding available," McNee said.

Shares of LIC trade on the NZX in a market restricted to members of the cooperative. They were last quoted at $6.341, giving the company a market value of $187 million.

Last month LIC reported full-year profit dropped about 24 percent to $18 million, reflecting spending on technology and infrastructure and a drop in the value of its biological elite bull team.

McNee said LIC is upbeat about the outlook for the dairy industry despite this year's slide in prices of dairy products.

"We still see massive opportunity in the dairy industry and we see a good year for us," he said.

(BusinessDesk)

Comments and questions
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China Ministry of Finance provide RMB 1.2 billion to purchase breeding animals and frozen semen for farmers in 2014: According to the news from China Ministry of Finance website, to further develop China’s husbandry industry, MOF will allocate RMB 1.2 billion to improve countrywide genetic and encourage farmers to introduce breeding live animals and frozen semen. In which RMB 661 million subsidy is used on live breeding pigs, RMB 260 million for cows, RMB 45 million for beef cattle and RMB 198 million for sheep.

Michael Boddington from Asian Agribusiness Consulting (AAC) has been involved in agribusiness in Asia since 2000. AAC has office both in Vietnam Ho Chi Minh City and China Beijing. So AAC has a thorough understanding of the Viet Nam and China aqua industry and produces up-to-date research reports on the market. We can offer insights on supply and demand trends and comments on the future structure of Asian agribusiness. If you would like to know more please email michael@boddingtonconsulting.com

Source from: http://www.ixumu.com/forum.php?

Compliance costs are killing a healthy export trade in farmed animal embryos and semen and threaten to close the only licensed facility for embryo export left in the South Island. North Otago veterinarian and leading Angus beef breeder, Neil Sanderson, and his wife Rose, run a specialised embryo transfer business that has been exporting embryos for about 35 years. The Sandersons' company, Advanced Genetics Ltd near Ngapara, has successfully exported embryos to China, Australia, Canada, Denmark, United Kingdom, Germany, the United States, Uruguay and Argentina, where they have several large joint venture breeding programmes. ...
Responding to the points raised by Mr Sanderson, the Ministry for Primary Industries (MPI) said it set veterinary charges of $102.20 an hour (including GST) for veterinary checks for live animal and germplasm (semen and embryo) exports. These charges were legislated under the Animal Products Act. This figure was determined after consultation with exporters and was in line with MPI's policy for cost recovery. It may include an inspection of the animals/germplasm, documentation checks and certificate signing. The ministry said it did not, however, set the costs for the independent verification agencies compliance audits, which were set by agencies approved by MPI. The New Zealand standard for centres/teams that exported germplasm required an annual check by the IVA, but European Union requirements were every six months.
http://www.stuff.co.nz/business/farming/agribusiness/9786363/Costs-killing-embryo-exports 5/3/2014

Hamilton-based LIC earns about 6 per cent of its $200 million annual revenue from exports. McNee believes that could be grown significantly and says that over the next year there will be a focus on potential opportunities and crunching the numbers. LIC exports semen to the United Kingdom and Ireland, Australia, South America and North America. McNee thinks China offers big potential and says exports could be ramped up to South America, if the numbers stack up. He sees opportunities beyond semen sales, with LIC's domestic-market strengths in information and automation systems also candidates for export. "It's something we'll be focusing on in the next 12 months. It'll have to stack up; we are here to make returns for our owners and our owners are New Zealand dairy farmers. It has to be profitable." Exporting could also help LIC better understand developments in world markets, he says.
http://www.stuff.co.nz/business/farming/dairy/9362662/New-LIC-boss-eyes-up-export-potential

In February, LIC purchased the assets and business of Waikato-based Dairy Automation. The company is also looking at expansion overseas, which at present represents just 6 per cent of revenue. Bull semen is responsible for about 44 per cent of revenue but its share of earnings is diminishing as LIC's other businesses grow at a greater pace. LIC's herd testing makes up 14 per cent of revenue. System Minder - a herd management system used by about 90 per cent of the country's dairy farmers - makes up 10 per cent and ear tags about 8 per cent. The company sells bull semen to the United Kingdom, Ireland, Australia, the United States, South America and South Africa. There have been a few small orders to China, a market which McNee sees as having huge potential.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11254435