Fur farm float for $750,000

Press, 28 October 1982, Page 25

Fur farm float for $750,000

Aorangi Furs. Ltd. is seeking $750,000 venture capital to establish its fitch fur farming operation in Otago. The company was incorporated in Dunedin on September 10.

The Development Finance Corporation has subject to the successful flotation of the issue, confirmed in principle an advance of more than $400,000 directors said.

The issue is for 1,500,000 ordinary shares at par 50c. The minimum subscription level is $400,000. The issue opened for public subscriptions on October 14 and closes on November 12.

The company is budgeting for establishment costs of $845,000. Its budgeted trading results for the first three years of operation are estimated profits (before depreciation and tax) of $51,000, $115,000 and $347,000.

High capital expenditure involved in establishing and then expanding the complex means that there will not be a trading surplus initially, says the chairman (Mr I. W. McMeeking). But "even in the first year the income earned will significantly exceed the running costs. “Within a very short period, there will be a trading surplus available for distribution to shareholders. Forecasts indicate that the pre-tax profit is expected to reach at least 50 per cent of the total shareholders’ investment within three years."

i As consultant. Aorangi J have engaged world fitch

breeding authority Mr Newman Burberry of the Scottish firm, West Highland Furs, which will supply the initial breeding stock of 1000 females and 250 male fitch. The fitch will breed shortly after their arrival. Selected young will be retained as replacement stock and for the expansion of the breeding colony. Other stock will be sold to breeders and a small number of pelts will be produced in the first year of operation. These pelts will be marketed through the fur company of Hudson Bay and Anning in London and New York, the major world fur trading centres.

“We intend to increase the breeding colony of fitch from 1000 females to 2000 within two years,” Mr Burberry said. “The handling and processing of pelts from other producers will be of benefit to the industry as a whole while allowing maximum utilisation of our plant and equipment." All breeding and management data and records will be computerised to allow optimum genetic selection and management control. A research programme has been designed to improve the quality of pelts. Dr Michael Godfrey will be the managing director of Aorangi Furs, with Ms Lorraine Francis as senior technical director.

Mr McMeeking says: “We may also be able to diversify further as new ventures develop,” but early goals are to be the largest fitch farm in New Zealand.