When Lachie Johnstone first started on the board of Farmlands 19 years ago the rural services cooperative ran 32 stores with a turnover of $280 million.
The Otago farmer and businessman will take the helm following the annual meeting in November, succeeding Lachie Johnstone, who decided to stand down after 19 years.
Hewett says there is a lot of change and uncertainty in the rural sector, and so huge opportunities.
“A stack of stuff is coming up and we need to make sure we’ve got our eye open for opportunities for our customers and shareholders. And we must ensure our business is capitalised adequately to take advantage of it.”
With turnover of $2.4 billion, Farmlands operates 81 retail stores, feed barns, seed stores, fuel distribution, grain trading, rural property and horticulture.
It’s a diverse business with a lot of moving parts, Hewett says.
“My view of Farmlands is that each of its individual business units aren’t that complex, but the complexity comes when you put it all together,” he told Rural News.
“It’s meeting the needs of our shareholders and customers and anticipating what they’re going to need in future, given changing farming practices and the increase in lifestyle blocks.
“The big one right now is the Zero Carbon Bill and what that means for our shareholders’ and customers’ businesses.”
He says Farmlands is also well placed for the future with its revamped integrated computer system Project Braveheart now coming on line, which he claims will “turbocharge” the business.
Hewett’s appointment builds on a strong working relationship with Silver Fern Farms. He recently stood down as chairman of Silver Fern Farms Co-operative, but remains on its board.
He remains co-chairman of its meat processing and trading arm Silver Fern Farms Ltd, jointly owned by the co-op and Shanghai Maling.
Hewett points out that Silver Fern and Farmlands share many needs and much overlapping shareholding.
In recent years they have co-operated in joint governance training and mentoring with their To The Core project aimed at identifying and fostering shareholder talent to raise governance standards.
Hewett says all co-ops need an eye on succession, given the fiduciary duties and obligations now placed on business directors.
A similar story
Commenting on the recent sale of the Westland Co-operative Dairy to the Chinese dairy giant Yili, Rob Hewett says Westland had found itself in the same space as Silver Fern was in several years ago.
Silver Fern’s case was solved by the then-controversial investment from Shanghai Maling, which now jointly owns, with the co-op, the meat processing and trading arm Silver Fern Farms Ltd.
Capital has to come from somewhere, said Hewett. “In the case of Westland, and Silver Fern Farms, the capital was introduced by an overseas partner from China,” he told Rural News.
“I have no problems with Chinese money. I’m not proposing that Farmlands needs Chinese money – or any money for that matter – but it’s something you need to keep a weather eye on.
“The challenge with a co-operative is to keep this topic under control. The last situation you want to get into is to diminish capital over time by not reinvesting.”
Hewett says a co-op is there to serve its members, and part of that obligation is to ensure a business is adequately capitalised -- but capitalisation is always a challenge.