John Roadley Speech To New Zealand Dairy Group

Speech Notes

John Roadley
Chairman, Global Dairy Company

Special General Meeting
New Zealand Dairy Group
Matamata

Monday 18 June 2001

The decision that is being made here in Matamata – and in Ashburton and Invercargill – and in Hawera, is the most important commercial decision in New Zealand’s history. It is the next logical stage in the evolution of our dairy industry.

The strength of our industry has always been our unity. It has given us scale. It has maintained our industry under farmers’ ownership and control.

Half a century ago there were hundreds of dairy co-ops in New Zealand. We achieved unity and scale through the New Zealand Dairy Board. It has made us the most successful industry in New Zealand. We’ve built some of the world’s most popular dairy brands. Our marketing network spans every continent and every almost every country. We’ve developed a reputation for quality, reliability and food safety that is second to none. We’ve become the world’s leader in whey, casein and protein research. Our farm production is by far the most efficient in the world.

Today’s vote is to protect those assets, built up by farmers over the years.

Through the 1990s, dairy farmers have merged their co-ops to seek greater manufacturing scale and efficiencies. We now have just two major co-ops. It just doesn’t make sense anymore to have them separated out from the marketing arm. The vote is about created a fully-unified business. We bring the two companies together with the Dairy Board to create one fully-integrated co-op, owned and controlled by New Zealand dairy farmers. We’ll have our manufacturing and marketing arms working as one, removing costly duplication and offering our customers improved and faster service.

The milk we produce on our farms is one of the most versatile products in the world. At one end of the spectrum, it is nature’s perfect human nutrition. At the other, we’re putting proteins from milk into products for an extraordinary range of other industries. This merger will give us the scale to maximise the value of our intellectual property, our R&D programme, our marketing network and our status as the most efficient producers of milk in the world.

The efforts of the last 50 years means we’ll start out at number nine in the world. Our strategy will see us reach the top five – roughly we need a 20 percent increase in revenues to make it. From there, we will have the market power we need to compete. We’ll be more attractive as a joint venture partner, such as with Dairy Farmers of America. There is our Australian strategy. Your vote will open up all those kinds of opportunities.

We have an extraordinary history – the envy of the rest of New Zealand business sector. We’ve achieved it because dairy farmers over the years have made the right decisions to achieve unity and scale. Thanks to them we have great platform on which to build for the future. I urge you to make the right decision today. I urge you to vote yes.

I move that you, the shareholders of New Zealand Dairy Group, vote to merge with Kiwi Co-operative Dairies, to create a new, integrated, farmer-controlled co-operative.

ENDS

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