Rural News // october 8, 2013
6 news
TAF architect eyes board directorships SU D ES H KI SSUN sudeshk@ruralnews.co.nz
OUTGOING FONTERRA chief financial officer Jonathan Mason is eyeing directorships in New Zealand. US-born Mason, who last month stepped down after nearly five years with the co-op, says he loves New Zealand and plans to live here. Earlier this year, he joined the boards of electricity company Vector and kiwifruit trader Zespri. Mason also serves as a trustee of the University of Auckland endowment fund and on the university’s business school advisory board. “I’ll stay in New Zealand. I love living and working here,” he told Rural News. “I’m looking at taking on a variety of other directorships.” And he plans to study New Zealand history in his spare time. He joined the co-op at the height of the global financial crisis in 2008-09 and is credited with guiding the co-op through expensive borrowing rates. In
structure will continue 2011 he was named CFO to evolve. “One chalof the Year and recoglenge with TAF is that nised for his groundif Fonterra was really breaking approach to successful and its share changing Fonterra’s price rose higher, then capital structure and it would prevent farmintroducing TAF. ers from joining FonMason says when terra. TAF is a work in he joined the co-op it progress,” he says. faced “very expensive Former Nestle execborrowing rates”. The utive Lukas Paravicini co-op’s debt ratio was Jonathan Mason has succeeded Mason, high (60%) and it faced whose legacy is invaluable, says Fona strong redemption risk. Mason led Fonterra’s bond issue terra chief executive Theo Spierings. “Jonathan joined us in 2009, in the overseas, raising money at long-term fixed interest rates and using the cap- midst of the global financial crisis. He ital to refinance debt. The debt ratio led our finance team through those difficult times, and the cooperative is now 39%. About one-third of Fonterra farm- emerged from the crisis in a strong ers (based on milksolids production) position. He then helped to deliver opposed introducing TAF. Some farm- our new capital structure with the ers feared it would lead to the co-op successful implementation of TAF. becoming privatised. But Mason says He dedicated himself to building and farmers now realise a strong co-op strengthening our finance function and team.” and TAF can exist side by side. He predicts the co-op’s capital @rural_news facebook.com/ruralnews
Wool processing costs could be halved FARM-TO-SCOUR COSTS could be at least halved for some Wools of New Zealand growers through the company’s new farm-to-scour service agreement with Wool Services International (NZWSI). Wools of New Zealand chief executive Ross Townshend believes the arrangement could save some wool growers up to 30c/kg. “This is entirely voluntary,” he told a roadshow in Wellsford, announcing the agreement with WSI. “The last thing we want to do is inflict on you a mandate to do that. A lot of you have a relationship with stock and station, brokers, whatever and you are free to stay with them. “We think we can genuinely deliver a saving of about 30c a kg on the directto-scour model. That is worth having; it is not mandatory for us but it’s worth having.” Through the arrangement Wools of NZ can maintain farm identify and integrity all the way through logistics, which was a key to high end markets, particularly in UK and Europe. “This is about doing things smarter and more efficiently at home. We will be offering some plans though WSI: we have
a weekly spot price, a monthly scheduled price and in time we will be moving into more specific contracts with Wool Services.” These will include supply to particular specifications in addition to similar contracts through Wools of NZ. The agreement “provides the ability for us to cherry pick,” says Townshend. “We can put all our wool through the Wool Services model or hold some of it back for Wools of NZ models. They can deal with some of the commodity end stuff. We frankly don’t have a huge structure to do that yet. But as we build our value-added side, we can cherry pick in some part of this.” Townshend says this latest strategy is to build process capability. WSI will provide all back office logistics to move wool efficiently from farm directly to the scour and ultimately to market. It was better to use WSI’s established systems “rather than reinventing the wheel at significant cost”. Michael Dwyer, NZWSI chief executive says the partnership with Wools of New Zealand made fundamental commercial sense. – Pam Tipa