Acumen, strategy helped firm grow
T’S been a great ride.’’ Stuart Heal acknowledges he will miss his involvement with Pioneer Energy — one of Otago’s quiet achievers — but the Cromwellbased businessman is also keenly aware of the importance of succession planning.
That was something he learnt during his tenure as chief executive of South Islandbased rural supplies business CRT (which later merged with the North Island’s Farmlands to become a national cooperative).
Mr Heal, also a former New Zealand Cricket chairman, believed people often tended to stay in exciting roles for too long, and he was happy to hand the Pioneer role over to Rob Hewett who had been chairmanelect for nearly a year.
In many respects, Pioneer was similar to CRT in that the focus was on making money to distribute to shareholders. At CRT, those shareholders were the farmers; at Pioneer, it was the community.
Pioneer was formed in 1999 after the electricity industry reforms and evolved from the generation assets of the former Otago Central Electric Power Board, and it now owned and operated a diverse portfolio of energy assets, products and investments throughout the country.
It is whollyowned by the Central Lakes Trust and pays an annual dividend to the trust. The money is given by the trust to community projects and services and, since its inception in 2000, it has distributed more than
$115 million.
Mr Heal joined the board in 2007, having finished at CRT in 2004 after 20 years as chief executive and his entire working career with the company, starting in Gore.
He and his wife Adrienne had bought a property in Cromwell as a holiday house and they ended up moving to Central Otago permanently with the intention of him moving from management to governance.
Wanaka businessman Ian Farrant was particularly helpful, as a mentor, and a ‘‘pretty good example to follow’’.
After moving to Cromwell, Mr Heal took a year to catch his breath after what had been a fairly exhausting time at CRT.
Pioneer’s advertisement for directors appealed to him; while he knew nothing about the energy sector, it was locally owned and the money went back into the community. Basic business rules applied anywhere and he figured he could learn about the sector.
When he joined, Pioneer Energy was ‘‘pretty tiny’’ and ‘‘if it rained, we made money, if it didn’t, we didn’t’’, he said succinctly.
Several years later, Sir Eion Edgar — who has had a long involvement with the Central Lakes Trust — commented that the company had a ‘‘lazy balance sheet’’.
In 2012, Pioneer opened its first wind project — the Mt Stuart wind farm — on Mr Hewett’s farm on the southwestern side of the Manuka Gorge, and that was the beginning of its diversification.
The following year, Mr Heal took over as chairman from Allan Kane, who had been ‘‘fantastic’’ to work under, while chief executive Fraser Jonker had just been appointed.
The company started to diversify and grow ‘‘pretty aggressively’’ with the full support of its shareholders and, in 2016, it underwent rebranding.
Other projects continued and partnerships developed to enable growth to happen.
In 2016, there was the acquisition of the Aniwhenua hydropower station in the Bay of Plenty, which was its biggest investment and also a huge move.
Until then, the company was only really in OtagoSouthland and only in run of river. When it started on its growth path, it knew it had to have bigger geographical coverage and wider spread in the energy sector, he said.
Last year, it unveiled a longawaited multimilliondollar hydropower scheme near
Alexandra. The system, sourced from the Fraser River, could generate enough electricity to power 4000 households.
While the final figure for the project was not disclosed for commercial reasons, the company previously confirmed the project was worth more than $20 million.
The Matiri hydro scheme at Murchison was due to be opened, continuing the geographic spread, while work was under way on a joint venture at Reporoa — building New Zealand’s first largescale food wastetobioenergy facility.
The anaerobic digestion facility is owned by Ecogas — a joint venture between Pioneer Energy and Ecostock Supplies Ltd — on land owned by T&G Fresh, a New Zealand fresh produce business.
The project aimed to be ready and operational in 2022. When up and running, it would turn 75,000 tonnes of organic waste, from businesses and kerbside food scrap collections throughout the North Island, into sustainable, renewable clean energy.
The facility will use anaerobic digestion — a technology already used successfully overseas — to generate enough energy to annually power up the equivalent of about 2500 households in the region, produce clean biofertiliser for about 2000ha of local farmland, and provide CO2 and heat to enhance the growth of tomatoes in T&G Fresh’s local glasshouse.
As Mr Heal later pointed out to Sir Eion, the balance sheet was ‘‘not lazy now’’.
The company could have stayed small but, fortunately, it had the support of its owners to keep growing. Quite rightly, there was the expectation of a dividend, he said.
The community was extremely fortunate to have both Pioneer Energy and the Central Lakes Trust, something that residents did not necessarily realise.
Business in general was hard, and energy was a tough sector. But Mr Heal was also a great believer that if a company had an agreed strategic plan and direction, then it had a much greater chance of succeeding.
Pioneer had been strong strategically; there was no confusion about diversification, both geographically and within the sector.