My wife, Brigette and I farm our 470 ha Rosedale Property in the Waikaka Valley, Southland. 

After completing a B.Com.(Ag) at Lincoln University, I spent 4 years working in the Banking and Financial Markets of London. Initial employment was with American Broadcasting Corp. and then a period with The Economist Newspaper before a year with Barclays de Zoete Wedd (now Barclays Investment Bank) and then two years with Credit Suisse First Boston.

Brigette and I returned to NZ in 1990 to Rosedale, farming initially with my father George and then additionally my brother Andrew. Over the following period we grew the Rosedale family farm operation five fold from 3000 stock units to 15000 stock units with the purchase of neighbouring properties and a hill property in the South Otago area. The farming operation over that time comprised sheep, beef, deer and stud sheep.

Separating operations in 2013, Brigette and I continued to farm the Rosedale and Grandview properties growing our business further with the purchase of the Browns property. This year Rosedale wintered 8000 stock units comprising a mixture of sheep, beef and stud stock.

We have two adult sons, Lochie and Dirk, both motivated in the opportunity to go farming. Lochie has just returned from a period overseas after completing a Bachelor of International Business from Otago, and Dirk has just completed his third year of an Engineering Degree at Canterbury.

Since returning to NZ, I have been heavily involved in the complete cross section of country life holding various Governance and Community roles on School, Sports and Church Management Boards and was Treasurer of the Gore High School Foundation for 12 years.

I have also been involved in the coaching of High School Sports teams and the local Special Olympics Basketball team. 

Farmer frustration in 2012 leading to the formation of MIE became the opportunity to embark on a period of greater Meat Industry learning and understanding, including consultation with a number of Business, Co-op, Banking and Meat Industry leaders throughout NZ. I also took the initiative to visit first-hand the markets of UK,  Supermarket buyers and Alliances UK Business to best understand the UK situation, and to consult with leaders from UK Farming organisations

Further motivated by a lack of Vision and clear Strategic Plan I stood for the Alliance Board in 2013 on a platform of change gaining support to represent Shareholders as one of their Alliance Directors (Refer 2013 Platform for Change for my 2013 Vision)

" In my 3 years as your Director I have pushed logically and intelligently for the full transformation of Alliance into a forward facing Market focused Co-op with the sole motivation of maximising Farmer Suppliers returns in the Value Chain."

My first three years on the Alliance Board held no surprises other than the scale of opportunity we have to transform our Alliance Co-op into the strongly resourced highly profitable Company I spoke of in 2013.

In the first three years I have learnt the importance of the patience required to influence and logically and intelligently carry people forward with a Vision. For many of us as individuals in our own operations, strategic change can be spontaneous and dynamic. In a $1.4 billion Company like Alliance the transformation is slower but the potential effect greater.

A further strength I offer revolves around the importance of relationships. Relationships within the Board, relationships with customers, relationships with employees and relationships with shareholders. You represent the Board at every level of engagement and the ability to cultivate those relationships is extremely important.

Holding true to the values on which I stood for the Board has also been important. While the possibility for Structural change in the Industry and Co-op aggregation diminished I have stood firm to the core Co-op principles articulated from the very early days of MIE, and have maintained a sound relationship with the many great people I met on that journey.

The future for our Alliance Co-op is bright if we continue on the transformation we have started.  In 2013 I wrote  “Please do not make the assumption that this will come easily or immediately but please acknowledge the possibility that change and transformation can achieve a fundamental shift in the way we execute our business and view the future of our Alliance Co-op.”

That is the reality of where we are now. Change and transformation are achieving the fundamental shift in the way we execute our business. It hasn’t been easy and it hasn’t been immediate but that change is now visible. The transformation has started and our approach now has to be relentless in pushing forward to fully transform our Company.

" I am a farmer and above all else know exactly what farmers want. I believe Alliances core function is “to create a platform for Co-operatively minded farmers to achieve the maximum value for their product in the value chain."

Proven Governance Experience

> Hands on Farmer/Director on 8000su intensive operation
> Alliance elected Director 2013
> Alliance audit and risk committee
> Member of the NZ Institute of Directors (IOD)
> Treasurer Gore High School foundation 12 years
> Full rural governance experience on range of school, church and sports organisations

Extensive Commercial Background

After completing a Bachelor of Commerce (Agriculture), Lincoln University, I spent 4 years working in London’s commercial banking and finance sector. Employment experience was gained with American Broadcasting Corporation, The Economist Newspaper, Barclays de Zoete Wedd (Barclays Investment Bank) and Credit Suisse First Boston.

Proven Strategic Growth

Returning to New Zealand I jointly grew our family farming operation from 3000su to 15000su, with the growth expansion of 5 additional farming properties. Splitting family farming operations in 2013 I have since further grown our current operation by 20% with the expansion of an additional property. Successful commercialisation of a new composite sheep breed and stud operation.

Clear Understanding of Risk and Opportunity

My corporate commercial background in London combined with a record of successful strategic growth in my own personal business gives me a real understanding of risk and opportunity. Understanding financial accounts is very important in my role on Alliances Audit and Risk Committee. It is an absolute advantage to bring to the Board Table skills outside traditional farming experience

Industry Knowledge

Prior to my term as your elected representative on Alliance I invested my own personal resources in travels to Europe and the UK to talk with UK and French farming leaders to fully understand both the UK and French markets. I also initiated visits with UK supermarket lead buyers and spent time at Alliance’s UK Business. Since becoming Director I have visited India, China and Hong Kong for a most valuable insight into Alliance’s Asian operation. Relationships developed on that visit have I believe been very valuable in the ongoing growth of both our Indian and Chinese operations.

GROUNDING TO KNOW WHAT WORKS FOR FARMERS

Above all else I am still a farmer and “get” exactly what matters to farmers. I have remained absolutely grounded in every part of my Alliance role and remain true to core Co-op principles. I represent every shareholder of the company and it is my responsibility to act in the best interests of our Alliance Co-op.

Knowledge, experience, hard work, communication, honesty, courage and the ability to build relationships remain the key attributes I offer you as your elected representative.
 

Testimonial

I have known Don Morrison for two years in my capacity as a Director & CEO of QualityNZ Ltd. QualityNZ supplies Alliance Group Limited lamb products into the Indian market. Specifically we exclusively market the Pure South branded product. In all my years of experience in business, there are a few special people who stand out for their great qualities, Don Morrison is one of those people. Don has many great qualities, along with a very strong business and governance acumen, he has the unique gift of being able to communicate effectively with people from different cultures and people from all spectrums of the community.

This was demonstrated personally to me during the time Don spent in India in 2015 representing Alliance Group. QualityNZ has Lamb Supply contracts in place with the leading hotel groups in India. These include the Taj Group (128 Hotels), the Oberoi Group (32 Hotels) and the Marriott Group (57 Hotels). Don met with some of the most well-known Executive Chefs from these groups. During our meetings Don was able to articulate a unique insight into the benefits of Alliance produced New Zealand lamb. The picture that Don was able to paint offered the Chefs a tremendous story to back up our best in the world product. Since Dons visit he has kept in regular contact with me, offering tremendous support and encouragement.

Dons calls and emails are well and beyond what is expected of a Director, they not only personally offer me a huge boost, they make me proud and motivated to represent Alliance in India. QualityNZ has now entered the Organised Retail Channel in India, our volume is over double where it was this time last year. Dons help and assistance has played a big part in this success.

In my mind Alliance, as Co- Operative could do no better than having a person of Dons calibre representing the 5000 odd Farmer Shareholders on the Board of Alliance Group Limited. He is an award-winning farmer, with huge integrity and a great passion to assist in the continued success of Alliance Group Limited.

Geoff Thin: CEO, QualityNZ

Three years ago I offered you a Vision and an absolute need for change with our Co-op. This year we delivered -Elevated Company Profit to $10.1 million

 > $ 9.8 million pool profit distribution straight back to farmers
> $85 million debt reduction
> $32 million investment in Capital Expenditure
> Strengthened equity position to 71%
> 43% improvement in Total Recordable Injury Rate
> Investment in Robotic and Systemised planning solutions
> $56 million tangible benefit gains from 129 strategic projects
 …and 2016 is just the start

Three years ago I first stood for the Alliance Board on a platform for change. I stood on a platform of Vision and I stood on a platform of Strategy. My vision hasn’t changed. One strongly resourced and highly profitable Company leading a resurgent red meat industry…our Co-op achieving the maximum possible return for us as farmers in the Value Chain. (refer 2013 Platform for Change)

Three years on, much has changed and yet the urgency for change remains the same. Anyone within or close to Alliance will understand that transformation. Transformation is the change we have already achieved, and yet a huge urgency and challenge remains as we transition from a processing based company into a forward facing, market focused food company.

Over the past three years the Board has honestly looked at our Co-op and the reality is the world had moved on but Alliance hadn’t. An absolute strategic shift was required, which was really a refocusing of what the Company’s core function was…to create a platform for Co-operatively minded farmers to achieve the maximum value for their product in the Value Chain.

This has meant a shift from being a processing focused operation into a food focused operation delivering the healthiest, tastiest Lamb and Beef to the tables of the world.

Breaking down Alliance’s three key operative functions into Livestock Procurement, Processing and Sales and Marketing we were not achieving world best practice in any sphere. This is no criticism of the 5,000 good, hard working employees who every day are passionate in their quest of returning the best possible return to farmers. Rather it is an honest examination of the lack of strategic direction from Board and Senior Management.

In my term on the Board change has been driven from the top. The appointment of a new CEO and the subsequent resourcing of talent capability within Senior Management and the creation of new Senior Management roles has resulted directly from the Strategic imperatives delivered from the Board. Every Senior Management appointment has come on the final recommendation of the Board.

Collectively Board and Senior Management have worked on a pathway to deliver added value to farmers through an initial series of 128 Strategic projects. These projects are simply the pathway to create the value within the Company’s operation to drive forward the second tier Market faced development. Currently the Board is focused on the deliverance of value through over 300 Strategic projects.

Deliverance of Vision, Strategy and Execution with Excellence are the key elements shareholders need to consider. 

Vision is where we want to take the Company…Strategy is how we get there…and Execution with Excellence is the relentless approach we need to apply to every strategic project. Nearly reaching a target is not enough, and nearly doing the job properly is not enough. At present the Board is relentless in the expectation we have on management to deliver and I know our new CEO is relentless on his expectation from Management within the Company to do the same.

Deliverance of these elements has resulted this year in improved Company Profitability, a strengthened Company Equity position, the distribution of Company Profit as a Pool payment and second tier Value Add investment in the Company’s operation.

The transformation of Alliance is not however a short journey and this year is only the beginning of the work that has to be done. Distraction to the Board from the deliverance of these key elements is the distraction from achieving the result all farmers’ desire in attaining the best livestock prices as a reflection of maximising their position in the Value Chain.

Foundation

The cornerstone of any new building is the foundation on which it is based. It is the same for any new Business. Alliance is a Co-op with a strong history and a firm foundation but the dynamics of the Red Meat Sector have changed and a new strong Co-operative Business model is required.

The three cornerstone sin which I firmly believe are inextricably linked in the passion and vision we need to drive the red meat sector to success.

I offer a Vision for our Industry, the need to drive supply back to the Co-ops as part of the successful Co-op model, and the aggregation and consolidation of our Co-op resources. 

Individually all three are extremely important. Collectively they are paramount.

Vision is so sadly missing from our whole sector.  Where are the farmer leaders coming through with the new ideas?      Where is the industry support for those Leaders?   The red meat sector delivers a premium product to discerning consumers in the world and yet we sit here in New Zealand apologising and embarrassed for being part of that Industry.

Vision is also sadly missing in our Alliance Co-op.  Where is the Strategy and Vision for our Alliance Co-op?  Where is the business plan to deliver that Strategy?  Where is the excellence and execution required to move forward from a processing focused business into a premium food supply operation.

 The only Industry Vision I hear is focused on us all producing more on the farm to remain solvent. Work harder and smarter and you might just pay the bills. Living in the Sheep Industry is like living in a vacuum where successive disappointments have sucked all the Leadership and Vision from our Industry.  Farmers need that Vision to know what we can achieve and what the goal is. 

My Vision for Alliance is a strongly resourced, highly profitable Farmer owned and Farmer controlled Meat Processing and Exporting Co-op leading a resurgent and profitable Red Meat sector.”

Highly profitable as we pursue a more market focused approach to sales, and strongly resourced in terms of market share, capitalisation and strategic direction. Please do not make the assumption that this will come easily or immediately but please acknowledge the possibility that change and transformation can achieve a fundamental shift in the way we execute our business and view the future of our Alliance Co-op.

That is my Vision and that is our Goal.  Farmers have heard so many times that we can’t change our Industry, that too many of them actually believe it.  They are almost institutionalised into the status quo mentality “We won’t get Government support, we need 80% of the supply, farmers won’t support it…” I am sick of hearing those same tired arguments.

Through the process of MIE consultation and discussion we know we can achieve it. Government has told us it is possible and will support change. Business and banking have told us it has to change.  

Graham Turley (head of ANZ Rural) “ the meat industry must change or face oblivion…”, 

Hayley Moynihan (Rabo Agri Analysis) .” the status quo is not sustainable…”,

Con Williams (ANZ) “…things need to change… collectively farmers have the majority of the responsibility for any change as they control supply, the vast majority of capital employed and own the majority share of processing capacity and IT.”

Change

And change is the only option for us as Sheep, Beef and Deer Farmers if we want a future. We have to take the responsibility Con Williams talks of and make it happen. No-one else will do it for us. Believe in that Vision and believe that it can happen… take ownership.

Driving supply back to the our Alliance Co-op is the first part of the process. Success of our Co-op depends on committed supply and loyalty. Farmer shareholders must support their Co-operative and Farmers supplying private Meat Companies need to rationalise their own direction if they want a future inside the supply chain.

We need to commit our supply to our Co-op to make the next stage of reform most effective.  Adding value and creating wealth as farmers only occurs when we are part of an integrated supply chain. It amazes me how many farmers use Co-operatives as a big part of their business success on the farm input side using fertiliser co-ops and CRT Farmlands purchasing options but then ignore the Co-op opportunity for the single biggest part of their operation that affects profitability…sale of their core product. To capture value we have to be in a position to create it.

And Alliance Co-op behaviour has to change to match farmer’s expectations and rebuild trust. First thing…Rebuild trust.  60% of shareholders supplying all their product to Alliance is not satisfactory. We need to rebuild full trust and capture the full supply from the remaining 40% or we are not meeting our core principles as a Co-operative.

The pervasive culture that emerges within the NZ red meat sector, influenced by the various patterns of behaviour, is one of competition, mistrust, uncertainty, frustration and anxiety. Such a culture is not conducive to generating the climate for innovation and risk taking necessary to stimulate the value-add initiatives, investment for growth, and talent attraction currently needed within the industry. The culture I promote as necessary for the sector to stabilise and grow is one of trust, transparency, collaboration, and innovation.

Alliance has to rebuild the trust again with all their shareholders and give every shareholder the reason to supply.  Alliance has to adopt procurement practices that reward all shareholders equally…. No premiums to anyone on the spot market… Full transparency…I don’t like supply volume premiums but understand why Alliance has supported this behaviour. Empowering shareholder supply remains the heart of a sustainable Co-op model .

And Alliance must create greater value in the market place giving shareholders a reason to support the model. Extending profit lines extends the value extension of the shareholders supply and is the core reason for being a Co-op member. A Co-op does not have a right to exist. It must meet the needs of its shareholders. It must create value. It must add value.

Alliance has a strong network of hardworking capable people from the slaughter board up. I visit plants every year to see lines of my lambs processed. People work hard and smart on the chain.  Marketing staff are looking at the new markets of China andIndia. I have visited the distributors in the UK to understand the process there and they work hard under a difficult selling climate. Research and Genetic information on behalf of clients thru the CPT is second to none. Hoofprint provides excellent benchmarking and decision analysis tools.

However our Alliance Co-op is failing. Our Co-op is failing because of a flawed business plan and our Co-op is failing because of the flawed structure in which we operate.

VISION

Falling supply volumes and falling profit lines dictate the business environment in which we operate. The operational structure of our business will not improve until we make the transformational change required to address either our cost structure or our added vale profit margins.

The Vision to succeed and the recommitment to Supply become the driver of success where the aggregation of Co-op resources is possible. Size, scale and critical mass are keywords to drive success. Vision, strategy, execution and trust are equally as important.

Diminishing supply has changed the dynamics of the Industry and Industry change is inevitable as a result.  This is our chance to dictate the terms of this change and be part of the future.  If we participate we can shape that reform to our benefit. If we don’t we will have lost that opportunity.

Last Man Standing is the most dangerous game to be playing when it comes to restructuring. I keep hearing the line “we can’t merge because of leakage…under a merger 1 + 1 wont equal 2…” Someone needs to explain to me the difference between leakage and shrinkage in terms of processing volumes… I think the annual shrinkage of lamb supply by 6.6% per year is a large challenge risk to our Co-operative and our whole Industry.

Over capacity exists as the largest challenge to our Industry. Over capacity, flat lining Co-op profit and declining farmer profits exist as the largest challenges to our Co-op. Our challenge isn’t to manage the whole Industry, our absolute responsibility is to manage our Alliance Co-op.

Farmer Co-ops currently hold 54% of the lamb supply.  Given Vision and Committed Supply that is a very strong base to start aggregation.  A good friend who knows a little bit about the dairy Industry told me of the situation before Fonterra.  Dairy Co-ops who had been competing for decades were “haemorrhaging money” despite a single seller desk through the NZ Dairy Board. Fast forward 13 years and witness the chasm that now exists between Dairy and Sheep profitability.

Undoubtedly we must reposition our Alliance Co-op… firstly with vision, secondly with an absolute return to the Co-op principles on which Alliance was founded and thirdly with the execution of a sustainable business plan. Aggregation then becomes a possibility.

Merged Co-op resources give us size and scale. Government have told us that they will back a plan that the majority of Farmers want.  54% is already a majority but given Vision and Supply that is just the start.

The status quo hasn’t worked and isn’t working

> shrinking supply volumes ( 27 mil 5 years ago, 17-18 mil today)…33% less lambs
> declining Co-op profits over the last 6 years , low capital base to deny opportunities. 
> decreasing farm profitability and increased indebtedness

And all at a time when world food demand is soaring, particularly for red meat as a protein source.

We need consolidation around farmer ownership and the Vision and Aspirational Goal of creating an entity that delivers stability and sustainability. Confidence and Vision drive Stability and Sustainabilty. Stability and Sustainabilty drive Confidence and Vision.

The new entity needs to be based on fundamental and proven core Co-operative principles as demonstrated by Fonterra. Yes milk and meat are different products but it is the fundamental Core Co-op principles that Fonterra uses that we need to replicate in the Red Meat Industry.

We need

> size and scale
> unity of purpose
> collective focus of resources
> an integrated business model
> best practise from both Co-op and farmers
> separation of governance and representation
And most importantly farmers being in control of their own destiny.

Please vote and use your vote wisely to shape the future of our Alliance Co-op.