Five Decades of Good Old-Fashioned Co-Operation

MEDIA RELEASE: Farmlands Trading Society Limited

Five Decades of Good Old-Fashioned Co-Operation

THURSDAY OCTOBER 18, 2012 FOR IMMEDIATE RELEASE

Annual turnover of $773 million dollars, almost 28,000 shareholders, and 47 stores throughout the North Island is what Farmlands Trading Society can toast on its 50th birthday.

The rural retail giant started in typical kiwi fashion with a cup of tea in the Eskdale Hall in rural Hawke’s Bay on December 17, 1962.

Chairman Lachie Johnstone says it is incredible looking back over the life of Farmlands and seeing how the co-operative has grown from such humble beginnings.

“Those original farmers most likely held high hopes for success, but were probably unaware that that original meeting would set the foundations for one of New Zealand’s most successful rural trading enterprises.”

Mr Johnstone says everyone at Farmlands is proud to be celebrating 50 years of the existence of the company.

“Much has changed since its origin in a generation of protectionism and very strong margins in the supply of rural goods and services. We now operate in an industry where transparency of information is a given and competition is fierce.”

However, Farmlands continues to do what it set out to back in 1962.

“The current Board of directors believes that Farmlands should never lose its relevance and the current strategy has been successful ensuring that this is the case. At no stage will we rest on our laurels.”

Farmlands was established when a group of entrepreneurial farmers and growers joined forces to secure the best possible prices on rural supplies for their farms and orchards. Their two objectives were to supply shareholders with products and services at a lower everyday price and to deliver long-term shareholder returns.

Chief Executive Officer Peter Ellis says 50 years on that hasn’t changed, and 2012 is about acknowledging and celebrating five decades of growth and success.

The celebrations include 50 days of savings, fantastic giveaways and a chance to win a Ford XR6 at Farmlands’ retail stores up until November 13, and all Farmlands branches are inviting shareholders to watch the Melbourne Cup at their local branch. Celebratory memorabilia includes the production of a book documenting the company’s history called Our Story – Celebrating 50 Years of Farmlands.

“It details the progress of the co-operative over the years, including the difficulties facing the early founding members, and the changes in recent history that have seen rapid expansion and success,” says Mr Ellis.

The founding members were reknowned innovators, and included Max de Denne, Tom Cranswick, Jim Robertshawe, Bill Youren, Johnny Gunn and Henk Bogaard.

In 1962 the business model they proposed was considered daring, although soundly based on the good old-fashioned values of a co-operative society.

Farmlands shareholders literally become an owner and partner in the business, so success was a win-win situation.

Farmlands is still being led with an innovative and progressive management style by Mr Johnstone and Mr Ellis.

Along with planning at a strategic level, the pair attribute much of Farmlands’ success to the people at the grassroots level – the 500 plus staff who deliver the Farmlands promises of value and service to shareholders on a daily basis.

Mr Ellis says the Farmlands team represents an important part of the organisation’s continuous improvement strategy, and are pivotal in supporting the recovery of the country’s rural sector.

Farmlands Trading Society Limited has moved steadily along a path, from humble beginnings of just 22 members and a first year turnover of £2,148.11.4d, to delivering impressive annual sales and profit figures, as well as healthy cash rebates to their shareholders. Any profit made – beyond what is needed to grow the business – is shared out as an annual bonus.

Today close to 28,000 shareholders enjoy special prices when they shop at Farmlands and receive exclusive offers at Farmlands Card Partners throughout New Zealand. Any profit made – beyond what is needed to grow the business – is shared out as an annual bonus.

A snapshot of Farmlands’ 2011/2012 financial performance:

annual turnover increased by 13 per to $773 million.

pre-tax profits before loyalty rebates were similar to the previuos year at around $5.5 million.

rebates to members increased by 23 per cent ($3.7 million) to $50.4 million
shareholder numbers increased by 925 to 27,925.

47 stores throughout the North Island, and on-track to have 50 stores by the end of 2013.

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