Plummeting sales forces C-Dax to cease trading
Farmer-owned co-operative Ravensdown is winding down the operations of its agritech subsidiary C-Dax following a long decline in sales.
It will pay a $21/tonne advance on farmers' annual rebate, to be paid from June 7, and has cut the price of urea to $495/t, effective immediately.
Ravensdown announced this at the opening of a precision blending tower at its Hornby, Christchurch, facility last week.
It's the first time Ravensdown has, in effect, paid an 'interim dividend' – three months early. The remainder of the rebate will be paid at the usual time, around August, after completion of the financial accounts for the year 2015-16.
Chief executive Greg Campbell says it is a deliberate strategy to improve financial returns at the co-op while farmers face exceptionally tough times.
"It makes sense that, with lamb and dairy prices where they are and dry conditions wreaking havoc with some farms' growing conditions, we don't wait to make one payment but split it in two," he says.
"As a farmer-owned co-operative, we'd also be delighted if the early June rebate portion has a flow-on effect to help all farming sectors and other rural industries and communities."
Meanwhile, the immediate drop in urea and ammonium sulphate fertiliser prices to $495/t puts them below the psychological barrier of $500/t for the first time since 2006, and little more than half what it cost at its 2012 price peak.
The precision blending tower, the first in Australasia, is a $6 million upgrade to the co-op's Hornby plant; it has taken three years to plan and construct. The heart of the system is a 32m high mixing tower supplied by the American company Sackett and Son.
Ravensdown gutted part of its existing premises to accommodate the tower, which now protrudes a couple of storeys above the roof as a new landmark on the Hornby skyline.
The new machine offers rapid and accurate blending of fertilisers to precise custom formulations according to each farmer's needs. The mix is fed directly to a waiting delivery truck, minimising handling and dust. With a capacity of 250t/hour and a turnaround time of only six minutes per truck it is about three times faster than the older systems.
Primary Industries Minister Nathan Guy officially opened the new plant, welcoming the investment as part of the drive to double primary sector export value by 2025.
He noted that Ravensdown and MPI were partners in the $10 million Pioneering to Precision programme which aims to improve fertiliser efficiency, and reduce waste and runoff, through highly accurate computerised assessment and application.
