Silver Fern approves China deal
Shareholders in meat processing co-operative Silver Fern Farms have strongly backed a joint venture deal with Chinese company Shanghai Mailing at a special meeting in Dunedin this morning.
The vote was 82.2% in favour of the transaction.
Chairman Rob Hewett said it was an exciting day for the co-op.
“The board believes this partnership will be a defining moment for our business, the co-operative as a whole, and our supplying farmers. It is gratifying shareholders agreed.
“We have a partner in Shanghai Maling who will invest $261m in cash for a 50% share of Silver Fern Farms’ business, in partnership with the existing Silver Fern Farms co-operative.
"The investment will provide significant financial capability to accelerate our global ‘plate to pasture’ strategy. In addition, with the extensive retail and distribution assets of Shanghai Maling and the broader Bright Food Group in China, we will have a unique opportunity to establish Silver Fern Farms as the premium red meat brand in what is the world’s fastest growing protein market.
“The new partnership will allow us to invest in the things we want to, not just the things we need to, which has been the position in recent times.
"The investment will see Silver Fern Farms have no debt and a positive cash position at next year end.”
Shareholder John Cochrane, who had campaigned against the joint venture, said farmers had made their views clear.
“I think it’s an overwhelming majority of people wanting the new joint venture to go ahead and I absolutely respect the decision,” he said.
“I hope that this will be good in the long term for the New Zealand farmer and indeed New Zealand”.
Mr Cochrane commended Mr Hewett on his conduct of the debate.
“He led the discussion very professionally with an in-depth knowledge of what he was presenting.
“I think he’s a very competent leader and chairman of the board, and we’ve also got a very competent CEO in Dean Hamilton, who I believe have done a fantastic job over the last two years and in some way are responsible for creating the interest that China has shown in our company.”
He said he would continue to support Silver Fern as a supplier and a shareholder.
“I’m happy to move on and accept the decision today”.
Rival meat processing co-op Alliance Group, which was seen as a potential merger partner for Silver Fern, issued a statement saying the Dunedin co-op was not a factor in its future.
“We have of course extensively evaluated the potential for merger with or acquisition of all or part of SFF just as they have no doubt looked at us over the years,” said Alliance chief executive David Surveyor.
“In developing our own strategy, we reached the conclusion that SFF is not critical to the co-operative’s plan to grow the business or deliver returns to our farmer shareholders.”
Farmers would continue to have a choice about where to send their livestock, he said.
“The investment in SFF may be game- changing for them, but it is by no means game-changing for Alliance Group. Our model is about building a better business and creating value for our farmer shareholders.”
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