PPCS support for combined model heartening

Media Release from MIAG

For immediate use

9 April 2008

MIAG is heartened to hear that PPCS “support the concept of a combined industry model.” The Dunedin-based company informed shareholders of this stance by letter earlier this week. (Editors note: Letter dated April 7).

MIAG Vice-Chairman John Gregan said the letter supported comments in an earlier company newsletter dated 27th September 07.

“The PPCS board concluded that the case for a merger concept was compelling and would be in the interests of the long term sustainability of the sheepmeat industry.

And that: “in PPCS' view we should not delay in implementing an immediate and long term vision for the meat sector which would capture significant benefit for farmers and that the longer we defer change, the longer we defer the opportunity for industry improvement.”

PPCS also state that the benefits of a combined entity cannot be achieved outside a merger and that there are limited opportunities to pursue joint marketing initiatives outside of a merger. They also say that attempting to market under a single entity offshore and competing aggressively in the procurement of livestock within New Zealand are diametrically opposed positions.

And: “While we acknowledge there are some challenges in a merger concept, PPCS believed a positive outcome could have been achieved as any merger would have been by agreement, independent valuations would have taken into account the companies respective positions and ensured all shareholders received fair value.”

Therefore, MIAG is astonished at PPCS’ lack of urgency and reluctance to “commit significant funds or time” as farmers hurt from their third consecutive year of unsustainable returns.

“The time for tinkering with a failed model and sitting on the fence is long past. Combined with the known factors impacting on current farmer profitability we see the long-term benefits of industry reform clearly outweighing any short term risks, Mr Gregan said.

“We believe PPCS shareholders will demand that they comment in full to jointly developing a new industry model NOW.

“In conclusion why wait when PPCS have clearly identified so many positives for a merger. What's has changed.”

ENDS

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