Poll shows 87% support independent evaluation

9 November 2010
Open letter poll shows 87% support independent evaluation

The poll of Silver Fern Farms and Alliance Group shareholders, initiated through an open letter to farmers over the past two weeks, attracted a low response. However, those farmers who did take the opportunity to express their opinion overwhelmingly supported the proposal to initiate an independent evaluation process.

A total of 517 shareholders responded with 87% indicating they supported Silver Fern Farms and Alliance in appointing an independent facilitator to chair a joint evaluation committee to:

•create a strategic plan for the future of New Zealand meat products and by products;

•agree on the appropriate governance structure to support that strategic plan;

•oversee the independent analysis of the financial outcomes of an amalgamation of the two companies; and

•publish a report on these matters to be distributed to shareholders, excluding confidential and commercially sensitive details.

Silver Fern Farms’ Chairman Eoin Garden says the low response was not surprising, as farmers are traditionally apathetic when it comes to voting. “However, the poll did face an aggressive push back by Alliance Group – who were opposed to even the suggestion of evaluating the amalgamation benefits – and that would have contributed to the low turnout."

“That said, farmers now have clarity as to Alliance Group’s position towards industry aggregation and in particular with another industry co-operative – that is, Silver Fern Farms."

Mr Garden acknowledges that Alliance Group will put industry aggregation on the agenda at its forthcoming Annual Meeting. “But, based on its board’s overly aggressive and negative reaction to the suggestion of an independent evaluation, we don’t expect the world to change."

On the other hand, Silver Fern Farms’ shareholders now have clarity, which enables the board and management to focus on its own strategy, and to use its strong equity base (70% as at September 2010) to improve profitability for both the business and for its farmer suppliers."

“We understand fully that the future for the industry and its sheep and beef farmers is dependent upon embracing change. We must place greater emphasis on capturing added value from the consumer and, indeed, back through the whole value chain. We must build relationships throughout the sector to capture the benefit of innovation and scale. That is Silver Fern Farms’ strategy going forward."

ENDS

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