Silver Fern chairman at home on the farm

Silver Fern Farms Co-operative chairman Richard Young holds Silver Fern Farms branded lamb hot...
Silver Fern Farms Co-operative chairman Richard Young holds Silver Fern Farms branded lamb hot pot rolls at an Ole supermarket in Jinan, southern China. Photos: Supplied
For Silver Fern Farms Co-operative's new chairman Richard Young, getting out on his West Otago farm is "like a release".

And that hands-on farm work was something he never wanted to lose, despite his increasing governance commitments.

"I can't wait to get home on Sunday and do some farm work. I'm a farmer. I don't want to lose touch with what farming is and what farmers do, through this," Mr Young said on Friday.

In recent days, he had been busy attending supplier roadshow meetings throughout the country and that followed a market trip to China in May with a group of Silver Fern Farms shareholder suppliers.

Mr Young took over as chairman in May. His predecessor Rob Hewett continued as co-chairman of Silver Fern Farms Ltd, which is jointly owned by Silver Fern Farms Co-operative and Shanghai Maling.

Mr Young joined the Silver Fern Farms board in 2013, having stepped down as chairman of Meat Industry Excellence to seek election.

MIE had been formed earlier that year to push for reform in the red meat industry but went into recess several years later, after a spate of resignations from its executive, particularly after Silver Fern Farms shareholders voted in favour of the joint venture with Chinese-owned Shanghai Maling.

At the time, Mr Young said he stood for a director's position in response to requests from farmers to achieve change within the sector.

Last week, he said it became clear that Alliance Group suppliers were not buying into the idea of consolidation; the board explored options with other players in the New Zealand industry and there was a general acceptance the industry had to change.

But the hindrance Silver Fern Farms had was its bank balance - " and we had to change that", he said.

There was a realisation the board had to look after its company first and it was conscious that if it did not, then the outcome would have been "far worse" than if it had a Chinese partner.

Throughout that process, Mr Young never had any regrets about seeking election. Both he and fellow director Dan Jex-Blake, who stood alongside him, had "Silver Fern Farms DNA" in their blood, he quipped.

The issues at that time around over-capacity were still there and, fundamentally, they were still of the view that the industry had to change. But they were also aware of the survival of Silver Fern Farms and being active in that change.

Silver Fern Farms had a good relationship with Shanghai Maling and the capital structure was sorted.

The opportunity in China was "huge", as it was in other parts of the world, and it was now probably in the best position - through its partnership - to take advantage of those opportunities.

The genial and down-to-earth Tapanui farmer describes, with a smile, the tenure on the board so far as "fun".

He never had aspirations to be chairman when he first joined the board but he described it as a great opportunity.

"How many other people get an opportunity like that?" he said.

He was excited by the opportunities and the foundation now in place, saying it was "onwards and upwards".

Participants on a Silver Fern Farms market tour to China attend the SIAL food show in Shanghai.
Participants on a Silver Fern Farms market tour to China attend the SIAL food show in Shanghai.
After attending Otago Boys' High School, Mr Young completed a commerce degree in economics at the University of Otago. He then spent seven years shearing before he went farming.

He and his wife Keri operate a 300ha sheep and cropping property at Tapanui, where he has been very involved in the local community.

He was very grateful for the "amazing" support of his wife, saying he would never have been able to take on the chairman's role without that support.

He was also encouraged by the support shown by shareholders over the past couple of weeks at the roadshow meetings.

The mood was good. Farmers were getting paid well for their stock and processors were able to capture good margins at the moment. There was nothing in-market to indicate that prices were not going to be stable to better.

Venison was probably the one species where price had perhaps been under "a wee bit of pressure".

The biggest topic of conversation at the roadshow meetings was carbon. Silver Fern Farms was the only meat company to submit on the first reading of the Zero Carbon Bill, he said.

It was working with the Meat Industry Association and Beef + Lamb New Zealand and would be submitting again.

He encouraged all farmers to read the Bill and submit if they felt like it, saying it was important that "our voices are heard".

He also encouraged shareholders to join market trips, saying it was a very valuable experience.

The most recent was Mr Young's fourth trip to China but the first time he had been out of Shanghai.

The trip included a visit to a Shanghai Maling canning plant producing a lot of pork, vegetables and soups, much of which was exported to Southeast Asia.

There was discussion around what could be done around white offals in a canned form, using some of Silver Fern Farms lower-end products.

But the challenge was the company did not have market access for that, although it was lobbying hard to "get some traction".

Ultimately, that decision would be made by the Chinese Government but getting that accreditation could have a significant impact on Silver Fern Farms' profitability, he said.

The group ate at a lot of restaurants that had Silver Fern Farms product, including a hot pot restaurant where honeycomb tripe from its Dargaville plant was served.

Time was spent with Shanghai Maling representatives who took the group around supermarkets and also to a subsidiary company which had a deli-butchery shop type operation.

Watching staff cutting meat to order, wearing Silver Fern Farms branded aprons and hats, was `pretty neat" and showed the value of that partnership with Shanghai Maling.

At a food show in Shanghai, attended by about 120,000 people, brand recognition was "amazing" for the group who were wearing branded clothing.

"I think each farmer in that group sold 10 containers of meat in that first hour," he said, laughing.

They visited a tannery - "an amazing facility" - where the water filtration system cost $100,000 a day to run and employed 10,000 employees who were all housed and fed and had their children educated on-site,

What was interesting was the tannery owner believed the quality of New Zealand sheep skins was inferior to Mongolian sheep skins, based on density and thickness. However, the quality of New Zealand skins, from a processing point of view, was "exemplary".

The group also visited a sheep farm on the outskirts of Beijing housing 11,000 breeding ewes, all indoors, on a 35ha property.

The operation was tidy and clean and the stock were in excellent order. A lot of Australian genetics were used.

All the feed was grown in the surrounding area - none was imported - and it was supplying 8000 rams into the Chinese sheep flock a year for breeding.

The operator's view was the domestic sheep flock was stable and starting to grow a bit. The Chinese Government was pushing farming indoors, although that growth was limited by ability to get feed in.

Silver Fern Farms Ltd held a board meeting in Shanghai, followed by a co-operative meeting the following day, given all the directors were there on the tour.

A very good meeting was held with Shanghai Maling, including talking about the strategic objectives of both parties and what that meant for Silver Fern Farms Ltd. There was "total alignment" around those.

Relationship-building was a big part of Shanghai Maling's business culture and the stronger those relationships could be made, the stronger the partnership would be.

Getting shareholders to China was important as was getting Shanghai Maling representatives on to New Zealand farms and into plants. He took a lot of confidence away from the discussion around the China strategy, he said.


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