Click photo to enlarge
Peter Macdougall
It was a natural progression into agribusiness politics
for Peter Macdougall.
In developing the 4500ha Millers Flat property, Minzion
Station, with wife Geraldine, Mr Macdougall said fertiliser
was his greatest input cost, so it was in his interest to
ensure he was getting the best deal from his supplier.
He had a reputation as a question asker at Southland
Co-operative Phosphate Company annual meetings, so former
chairman the late Bill Walker in 1984 invited Mr Macdougall
to stand for the board.
Twenty-five years and several company structures later, Mr
Macdougall (68) retired from the board of Ballance
Agri-Nutrients last year.
His retirement ended a career that thrust the former stock
agent into the midst of farmer politics and business mergers.
Mr Macdougall brought a thoughtful and practical view to the
board table.
He is considered in what he says and his concern and empathy
for his fellow man obvious.
In 1984, there were two fertiliser co-operatives in the South
Island - Ravensdown Fertiliser Co-op and Southland Phosphate
- and three in the North Island - East Coast Fertiliser, Bay
of Plenty Fertiliser Co-op and Fernz.
Mr Macdougall said Southland Phosphate was being squeezed by
the much larger Ravensdown, losing market share in Otago and
Southland, and struggling to fund repairs and maintenance on
its plant.
An approach by Ravensdown to take over the company was not
viewed as friendly.
"At one of my early board meetings, two Ravensdown directors
spoke to the board and said Southland should merge with
Ravensdown, and if it didn't, we would be pushed into Foveaux
Strait.
"Two other directors on the board, Charlie Smaill and Brian
Hore, said they didn't accept threats and I hate water
anyway," Mr Macdougall recalled.
The proposition did not add up.
Canterbury farmers were paying $26 a tonne more for single
superphosphate than those in Southland and the southern
directors feared their shareholders would pay for
Ravensdown's battle for market share in the North Island.
"It is important to have two competitive co-operatives on the
input side of a farming business," he said.
By 1992, Mr Macdougall was chairman of the renamed Southfert
and made an approach to Bay of Plenty Fertiliser Co-op (BoP)
to cement further existing working relationships.
Those initial approaches were rejected, but on a subsequent
rainy Sunday morning, Mr Macdougall received a phone call
from the BoP chairman, the tone of which prompted him to fly
to Tauranga the next day.
A joint venture was rejected and the conclusion reached that
a merger was the best option.
Mr Macdougall said it was a real win for southern farmers,
giving them access to the urea from the Kapuni plant in which
BoP then had a 30% stake, and preserving competition.
But when the proposed merger was announced, Ravensdown
countered with a hostile takeover, with the ensuing battle
lasting 18 months and only settled by a ruling from the
Commerce Commission.
Mr Macdougall was driven by a belief a merger with BoP was
correct for shareholders because it preserved competition and
encouraged the companies to invest in research and
development.
But the battle was unnerving for the Millers Flat farmer,
taking him into the unknown corporate world and involving
lawyers, threats of legal action and disturbed sleep.
It taught him a salutary lesson about managing co-operatives.
Southfert had a large number of dry or inactive shareholders
who eyed the cash on offer and risked swinging the final
vote.
Mr Macdougall said the lesson he took from that battle was
the need for co-operatives to have an accurate and current
shareholder register.
"Redemption is only a risk to a co-operative if there is a
big percentage of dry shareholders," he said.
With the Southfert victory in 1996, BoP went into expansion
mode, and today the renamed Ballance Agri-nutrients and
Ravensdown dominate, with market share alternating between
49% and 51%.
The year of the merger, Mr Macdougall faced director
elections and was returned with a higher majority,
endorsement, he said, of shareholder support for his stance.
His support for co-operatives was unwavering, and it was a
business model he would like extended to the banking sector.
Mr Macdougall is chairman of the New Zealand Co-operatives
Association and said co-operatives undersold themselves by
not promoting the fact they were locally owned.
While working to keep fertiliser prices competitive, Mr
Macdougall remains aghast at what he sees as a lack of
leadership in managing the exchange rate at a level which
allowed the productive export sector remained competitive.
Looking ahead, Mr Macdougall said the big issue facing the
fertiliser industry was security of supply.
Canadian potash and sulphur producers have merged their
marketing arms to create single sellers, but the fact
remained that New Zealand fertiliser use was small on a
global scale.
New Zealand fertiliser manufacturers need to form alliances
with raw material exporters to ensure they have continued
access, he said.
Back on the farm, Peter and his wife Geraldine have gone into
partnership with son Dougal.
