RD1 may of­fer farm­ers credit

Matamata Chronicle - - Rural Delivery -

Fon­terra’s re-ac­qui­si­tion of ru­ral sup­plies chain RD1 could lead to a new fi­nan­cial ser­vice for the dairy gi­ant’s farm­er­share­hold­ers.

The farmer-owned co-op­er­a­tive has bought back the 50 per cent of the 57-store chain it sold to Aus­tralian ru­ral sup­plies chain Land­mark in 2006 and plans to re­view the busi­ness over the next three months to find new op­por­tu­ni­ties.

RD1 di­rec­tor and Fon­terra’s com­mer­cial and strat­egy gen­eral man­ager Ja­son Minkhorst said a re­sult of the re­view could be a new fi­nan­cial prod­ucts ser­vice of­fer­ing credit for in-store prod­ucts and farm in­puts such as fer­tiliser, fenc­ing and farm equip­ment.

RD1 of­fered de­ferred pay­ment terms to Fon­terra farmer-share­hold­ers but had not pre­vi­ously of­fered a fi­nance ser­vice, he said.

The re­view would also in­clude these de­ferred terms, which were par­tic­u­larly in de­mand at the start of the dairy sea­son when cash­flow was tight be­fore milk pay­outs kicked in.

Fon­terra was able to buy the stake back un­der the 2006 sale agree­ment which gave it a pre-emp­tive right if Land­mark or its par­ent AWB was sold. AWB was bought by Cana­dian com­pany Agrium in De­cem­ber.

Since 2006 RD1 rev­enues have in­creased from $394 mil­lion to $741m.

The re-pur­chase price could not be dis­closed un­der the orig­i­nal agree­ment with Land­mark, Minkhorst said.

RD1 was formed in 2002 with the merger of the trad­ing store chains of the New Zealand Dairy Group and Kiwi Dairies.

The two com­pa­nies, with the sin­gle-desk ex­porter the Dairy Board, merged the pre­vi­ous year to form the jug­ger­naut Fon­terra, now New Zealand’s big­gest com­pany.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.