Landcorp Farming Ltd

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(No Transcript)
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Landcorp Farming Ltd
Presentation toFederation of Maori
Authorities Managing for Success
19 October 2002
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Landcorp Farming Ltd
Contents

• Overview
• Landcorp Farming Ltd
• Strategic Plan Overview
• Financial Performance
• Criteria for Success

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Landcorp Farming Ltd

• OVERVIEW

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Overview

• Farming is a multi million dollar business.
• Huge differences between excellent and poor
  farmers.
• Critical mass is important.
• Integration is important.
• Opportunities to leverage
• Genetics
• Forages
• Purchasing
• Money out means money in.

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• Landcorp Farming Ltd

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Corporate Agribusiness New Zealands Largest
Farmer

• 1.5 million stock units
• 118 farms totaling 378,073 hectares
• (including NZs biggest farm
• Molesworth Station 180,509 Ha)
• Landcorp farms sheep, beef
• dairy cattle, deer, goats and
• forestry
• Landcorp farms 893,090 animals

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Landcorps Opening Asset Base of 540 million,
last season produced

• 10,159 tonnes of beef
• 10,403 tonnes of sheep meat
• 3,173 tonnes of shorn wool
• 929.5 tonnes of venison
• 10.7 tonnes of velvet
• 27.8 tonnes of chevon
• 4.07 million kilograms of milksolids

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The Company complies with SOE Act and Companies
Act requirements -

• To be as successful and profitable as a non
  Government owned company.
• To operate with responsible and ethical
  governance.
• To be a good employer.
• To be socially and environmentally responsible.

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Landcorp Farming Ltd

• STRATEGIC PLAN OVERVIEW

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Key Performance Indicators Over 5 Years

• Gross revenue growth
• 5 compounding year-on-year
• Income/expenditure rations (Outputs/Inputs) 4
  year-on-year productivity improvement
• ROA WACC 1 in 6 years
• In constant commodity prices, exchange rates

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Landcorp Farming Ltd
STRATEGIC PLAN 5 Years
KPIs
Revenue Productivity ROI/ROA
C o n v e r s i o n
G e n e t i c s
B i o t e c h
P r o d u c t i v i t y
M a r k e t i n g
3.5 0.5 8.5
0 1.5 0
1.0 1.5 1.5
0.5 0.5 0
0 0 0
TARGET 5.0 4.0
WACC 1
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Conversion Business Plan (5 Years)

• 1.5m to 1.9m stock units
• Stocking rate increase by 30
• Increase in dairy cow numbers (now 14,000).
• Increase in deer numbers (now 68,000).

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Productivity Business Plan

• 4 productivity improvements annually
• Productivity Outputs
• Inputs (incl. Cost of Capital)
• Benchmarking
• Best Practice
• RD
• Procurement efficiencies

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Marketing Business Plan

• Fit for Purpose product
• QA
• Disease
• Paddock to Plate traceability to
• Achieve premiums over commodity returns

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Landcorp Farming Ltd
FARMPRIDE QUALITY ASSURANCE

• Landcorps own quality assurance program
• Builds on Landcorps culture of quality
  performance at all levels
• Encompasses every facet of on the farm activity
  (in a uniform manner)
• Animal Health
• Environmental Management
• Incoming/Outgoing products
• Product Quality
• Record Keeping
• Animal Welfare

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Strategic Plan GENETICS (an example

• 1 normal genetic gains
• 0.5 special genetic gains

5,000
No of animals
0
eg milk yield
or fertility
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Genetics Marketing Plan (5 Years)

• Lambing at 20
• Leaner, heavier lambs
• Fawning at 3
• Slaughter weights 10
• Time to slaughter 5
• Customised milk

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Financial Performance
Landcorp Farming Ltd
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Landcorp Farming Ltd
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Landcorp Farming Ltd
SOURCES OF REVENUE
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Landcorp Farming Ltd
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CRITERIA FOR SUCCESS
Landcorp Farming Ltd
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Issues

• Farming is a multi million dollar business.
• Business discipline
• Position descriptions
• Objectives (annual)
• 5 year Business Plan (including financials)

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Issues contd . . .

• Huge differences between excellent and poor
  farmers

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Issues contd . . .

• Critical mass is important
• Supply leverage
• Purchase leverage
• Integration is important
• Spread risk
• Integrate breeding/finishing
• Opportunities to leverage
• Genetics more animals more genetic diversity
• Forages new generation
• Sulla
• Chickory
• Plantain
• . . . With Grasses and appropriate stock

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Issues contd . . .

• Money out means money in examples

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Dairy Development (pre) West Coast
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Dairy Development (during) West Coast
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Dairy Development (during) West Coast
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Dairy Development (completed) West Coast
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Impact of land development on dairy production on
the West Coast.
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Rangitaiki Station (pre) Land Development
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Rangitaiki Station (during) Land Development
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Rangitaiki (completed) Land Development
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Impact of land development on stock production at
Rangitaiki Station
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Impact of land development on financial
performance at Rangitaiki Station