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PGGW sells NZFSU
The agricultural service companies of Pyne Gould Guiness and Wrightson NMA, were once icons in the agricultural industry.
But since the merger, and many other investment ventures, the brand seems to have become tarnished.
The leadership role of this company has been challenged, as other companies have acquired increasing market share.
With the sale of their shares of NZFSU the question remains, what return did investors get out of such a venture?
And while they seemed to be able to clip the ticket with management and services sold to NZFSU, the new owners are now saying the company has been badly managed , and fundamental strategic mistakes were made.
NZ agriculture needs a strong service provider, lets hope they can get their act sorted.
NZ Farming Systems Uruguay has been badly managed and has made fundamental strategic mistakes, says the Singaporean giant bidding to take over the company.Olam International, owner of an 18.5 per cent stake in NZ Farming Systems, has offered to buy the rest of the company for $109.5 million, a deal analysts have assessed as well below its asset value reports Stuff.
But Vivek Verma, managing director of Olam's coffee and dairy divisions, says the takeover's main goal is to buy just enough shares to achieve control – 50.1 per cent – and to correct management failures."But after spending some time on the ground and also following the history of the company, we have realised the company has been significantly underperforming and we believe that while the idea is right and Uruguay does present unique opportunities in dairy, we believe the company has erred on a couple of areas.
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NZ Farming Systems was established in 2006 by NZ farming interests, including PGG Wrightson and Craig Norgate. The idea was to use NZ expertise to develop dairy farming on Uruguay's lower-cost land, but Mr Verma said the idea had not been executed well.
5 Comments
Craig Norgate where are you
Craig Norgate where are you hiding?
Good Taranaki man!!. I did
Good Taranaki man!!. I did some work for Wrightsons and I think they missed the boat as far as there store operations are concerned by allowing the likes of RD1 to have a virtual monopoly in dairying areas and especially in expansion areas. To much energy was given to but-licking around the board room table in the past and not enough value was given to doing good business. Even know the board is not that impressive, too many of them failed to ask the right questions and come up with the right decisions in the past.
Craig made some ill-advised
Craig made some ill-advised decisions and in the end was the fall-guy for the whole board. The pertinent question is what were rest of the board contributing ? agreement? invoices for attendance?
The problem for PGW is their
The problem for PGW is their traditional business model is under attack from all sides. They face massive competition in retail, real estate, livestock, seeds,wool etc etc. Norgate could see all that and tried to reposition the business. He had the vision but played fast and loose and seemingly had the board mesmerised. They will need all Sir John Andersons skills to turn their fortunes around.
when a horse is that sick you
when a horse is that sick you put it down.