Silver Fern capital restructure 'could raise $128m'

Keith Cooper

Silver Fern Farms hopes to raise $80 million but could potentially raise $128 million through its proposed capital restructuring.

Chief executive Keith Cooper said the money would be used to reduce debt, including the $75 million in bonds due for repayment next year, with between $25 million and $30 million used for capital investment, such as rolling out its x-ray carcass-imaging and robotic technology developed with joint-venture partner Scott Technology, and funding its new business model.

Other companies are selling and marketing branded products, but SFF claims it is going a step further with its plate-to-pasture integrated supply chain strategy - supplying consumers with the type and form of product when they want it.

The strategy involves promoting SFF-branded, portion controlled ready-to-eat products complete with cooking instructions, designed to generate customer demand rather than supplying product then finding a customer.

SFF also claims its model differs because it links lamb suppliers with consumers, ensuring suppliers grew the type of lambs the markets want, supplied when they want them.

The company said this strategy was counter to the traditional meat industry model of maximising the throughput of animals through the plant and selling traditional cuts of meat, some of which were not wanted by modern consumers.

In a blunt assessment of how SFF could otherwise raise the money, Cooper said the firm could gain $50m by not spending a cent on its plants for the next two years.

- OTAGO DAILY TIMES