ZESPRI AGM Focuses on Strong Growth Plans

MEDIA RELEASE

ZESPRI AGM Focuses on Strong Growth Plans

Grower shareholders turned out in force to ZESPRI’s Annual General Meeting held in Tauranga today, to listen to ZESPRI Chairman, John Loughlin, and Chief Executive, Lain Jager, present the first forecast for the 2010/11 season, discuss the company’s financial performance for the 2009/10 season and hear about ZESPRI’s strategy for growth.

ZESPRI Chairman, John Loughlin, highlighted the significance of ZESPRI’s stable financial results in the context of market challenges from the global recession and climatic impacts on the crop.

“Both the 2009 and 2010 selling seasons have been characterised by tough market conditions in Japan, Europe and North America,” said Mr Loughlin. “Despite this, and some adverse weather which impacted crop volumes, sales of ZESPRI® Kiwifruit have remained strong overall.”

Earlier this year, ZESPRI made a commitment to triple its export earnings to $3 billion by 2025. “It is quite extraordinary to think that – thanks to our track record of research and development, innovation, marketing excellence and productivity improvements – we can realistically plan to become a $3 billion plus industry but still be using less of this country’s land resources than when we were far smaller – almost a fringe industry – back in the 1980s.

“It is this sort of productivity, together with products with broader consumer appeal, that will put money in the pockets of tomorrow’s growers,” said Mr Loughlin.

Mr Jager reinforced that new variety development is about bringing new products to market, which will attract new consumers to the category and earn new shelf space.

“Very simply, we are not going to commercialise every good cultivar. Rather, it’s about what will earn shelf space and genuinely add value to the category. That’s what will ultimately benefit grower,” said Mr Jager.

Mr Jager also acknowledged to shareholders that the company was currently investing heavily in future growth.

“This is about ZESPRI investing in the future growth of the industry and increasing the GREEN return and, as such, I’m confident that we’re doing the right thing.

“With our track record, we have earned the right to grow. The future is bright and I know we have the vision and determination to make the most of it,” Mr Jager said.

Other outcomes of the meeting included:

·         ZESPRI received overwhelming support (97.18%) to continue its 12-month supply strategy and its investment in new kiwifruit varieties, on the back of this year’s decision to commercialise three promising new kiwifruit varieties and to progress red varieties through to grower trials.

·         Chairman John Loughlin and Deputy Chairman Peter McBride were both re-elected uncontested and grower shareholders voted Bruce Cameron into the vacant grower director spot. Mr Cameron has been an active kiwifruit grower since 1978 and told shareholders he has an absolute belief in the single desk marketing model.

·         Shareholders John Bourke, Ian Elliot and John Griffin were appointed to the new Director Remuneration Committee to join fourth member, Sir Henry van der Heyden. As Chairman of Fonterra, Sir Henry has contributed to the dairy industry governance for the past 16 years and was approached by the ZESPRI Board because he understands the various aspirations of primary producers and the governance needs of an international business.

·         Shareholders supported a resolution put forward by shareholder Mr Alan Sutherland which called on ZESPRI to work with growers to simplify the payments system and make cash flow timing to growers as equitable as possible. Prior to shareholders voting at the meeting, Mr Loughlin confirmed ZESPRI’s support for the resolution with the proviso that any moves to improve the payments system must not “water down commercial drivers which give growers strong signals about the sources of ongoing value from the marketplace”.

·         Grower shareholders voted in strong support (88.4%) of a resolution to conduct a 5:1 share split next month, which will help shareholders better understand the alignment between their shares and their production.

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