Companies’ common interests

Press, 20 April 1982, Page 26

Companies’ common interests

Wattie Industries, Ltd. and Waitaki N.Z. Refrigerating. Ltd, had common interests which might easily be overlooked by New Zealanders, but which became apparent to. those considering the long term future of New Zealand food trading on the world market.

This was said by Mr W. T. Morriss in a, comment on Watties' announcement that it is offering 528.5 M for a 24.9 per cent stake in the Christchurch-based meat processor?

: “We are both processors of primary products. Waitaki N.Z. Refrigerating 'are New Zealand’s export pioneers and have been major commodity traders serving the international market. We began as domestic producers of

processed food with a strong consumer focus and we are moving more aggressively into international marketing. ■ “Our marketing activities may well be drawn together in the export area as New Zealand adjusts to consumer needs in the 1980 s and beyond. It is interesting to note that 40 per cent of Waitaki N.Z. Refrigerating’s export lamb is now pre-packaged and no doubt the company's processed exports will be increasingly, sold into the. same overseas markets as Wattie processed foods."

Mr Morriss said that both companies had valued relationships with growers and farmers but in the production and processing areas used different skills and knowledge. which were

unique to the two organisations.

“It is a sensible use of Wattie funds and it is also in the national interest for us to invest in a major and efficient meat processor such as Waitaki N.Z. Refrigerating as well as expanding our own meat processing facilities. Although more cooperation at the marketing end is desirable, it really is a Case, of complementary development in production and processing."

Mr Morriss said that freight to overseas markets was also a major concern to Watties and that New Zealand would need to avoid duplication of services. Watties were impressed with the concept behind Waitaki N.Z. Refrigerating’s trans-Tasman

shipping development ’ and felt that a closer working relationship between the two companies could also lead to mutually beneficial developments on that front.

"The decision to make this investment Was part of a long-stafiding plan by Watties to accelerate’ the company’s role in food related exports. Management had put forward a detailed proposal which had received the unanimous approval of the board."

Mr Morriss said that at the close of Stock Exchange trading yesterday Watties did not hold directly or through intermediaries any shares in Waitaki N.Z. Refrigerating, Ltd.

He also said that an earl'

announcement was being made in an effort to maximise the opportunity for small shareholders in Wai-

taki N.Z, Refrigerating to participate.

. Watties last week announced a 21 per cent increase in profits for the first six months of the current, financial year, which was most encouraging. The financing of this investment was well within the capacity of the group, he said.

The company’s earnings a share was expected to increase after the consummation of the deal, and the proprietorship ratio would still oe very strong, commented Mr Morriss.