8 Sep 2008

Farmers approve meat company partnership

7:03 pm on 8 September 2008

A proposed partnership of New Zealand's biggest meat company and biggest rural servicing company will go ahead.

Shareholders of the Silver Fern Farms meat co-operative approved the deal with PGG Wrightson at a special meeting in Dunedin on Monday.

It required 75% approval from the farmers who voted, with 75.62% of the votes cast were in favour of the partnership.

A PGG Wrightson spokesperson, Barry Akers, says he knew that result would be difficult to obtain, and it shows that farmers want change.

PGG Wrightson will pay $220 million for a 50% financial stake in the company, but farmers will still control it at board level.

Under the partnership, PGG Wrightson will become the stock procurement arm of Silver Fern and it could pave the way for further restructuring in an industry that is under pressure to improve returns to financially struggling sheep farmers.

Mr Akers says new capital Silver Fern Farms will receive from the partnership can be invested in equipment and marketing.

Silver Fern Farms is adamant the merger will not result in loss of control for farmer shareholders.

Chief executive Keith Cooper says the company's size will be doubled by the partnership, meaning farmer control will be preserved.

Mr Cooper says the partnership is also in PGG Wrightson's interests, because that company needs farmers to be making profits.