Barks like a dog
OPINION: Landcorp is putting a brave face on its latest result, highlighting its progress on KPIs like climate change and gender pay gaps.
The business signed a management joint venture with Chinese company Shanghai Pengxin, who bought the 13 dairy farms and three support blocks from receivers.
The new owners pumped in $23 million to improve the farms, now renamed Tahi Farms, owned by TheLand, a subsidiary of Milk New Zealand, the operating arm of Shanghai Pengxin.
Shanghai Pengxin and Landcorp formed Pengxin NZ Farm Management to revive the farms.
Speaking at the farms’ handover in Hamilton last month, Landcorp chief executive Steve Carden said he would not try to “sugarcoat” the joint venture.
“We had difficult beginnings: a complex partnership agreement and 13 very run-down farms in a state of disrepair.”
But despite this, persistence by Landcorp and Shanghai Pengxin managed to “work through a myriad of problems” to get the farms back to a state NZers could be proud of.
Carden thanked the staff for running the farms despite the problems of housing and poor milking and farm facilities.
The Collins farm in Hamilton, which hosted the handover ceremony, now has refurbished houses, upgraded milking shed, stock races, a new effluent pond, water pumps and troughs.
Farm manager Jason Colebourn started work when the farm was still under receivers KordaMentha; after working for Landcorp, he is now employed by Shanghai Pengxin.
Colebourn says the farm was run down and “needed a lot of work”.
He says a few races could not be accessed even by a 160hp tractor; staff houses lacked basic facilities.
About $180,000 was spent on the four houses – installing new kitchens, heat pumps, insulation and underground heating.
A new water reticulation system cost $160,000 and fixing the races cost another $140,000.
“The farm today is hugely different from what it was four years ago; that’s why 80% of our staff have agreed to stay on and work for Shanghai Pengxin.”
He says the staff who have left opted for other Landcorp farms.
TheLand chief executive agribusiness Justine Kidd says the joint venture was “a real innovation bringing together international equity with NZ expertise”.
“It has been tough: the farm assets needed work and investment, the milk price came tumbling down and the public scrutiny did not let up.
“It is a tribute now to stand here beside Landcorp and celebrate the achievements of this partnership…. It is a good news story for agriculture in NZ.”
TheLand is now looking to build on the work Landcorp has done.
The company has an interesting and diverse farm asset in the Tahi Farm Group and this presents both opportunities and challenges, Kidd says.
“Our underlying strategy is to grow our asset value, the asset being our people, community, environment and farms.
“We are seeking to understand where the opportunities are to improve our productivity, how we can keep producing quality milk for our consumers in NZ and China, improving our sustainability and enhancing the impact we have in our local communities and environments.”
From June 1 the 13 dairy farms are being managed by nine managers, three contract milkers and one 50:50 sharemilker.
Terry Lee, Milk New Zealand’s managing director, says the farms have been transformed under Landcorp’s leadership and now have a “a high standard of professionalism, in respect of farm management/productivity, environment protection, animal welfare and looking after people”.
“The impact of that transformation has been manifest -- bolstering and motivating the farm teams, their families and local and wider communities – and this is widely acknowledged in the dairy industry. We could not have achieved this without Landcorp; they have done a great job.”
TheLand also owns 13 dairy farms (Purata Farms) in the South Island. The company uses milk from the farms to make UHT milk and milk powder for export to China.
Shanghai Pengxin expects to ship 1900 containers of value added products to China this year.
