Strong prices bolster PGG-Wrightson merger

PGG-Wrightson chief operating officer south Hugh Martyn, left, makes a point to Baird McConnon, interim managing director, before the company's AGM in Dunedin yesterday.

Strong product prices were assisting in the bedding down of the newly merged PGG-Wrightson, interim managing director Baird McConnon told the annual meeting in Dunedin yesterday.

McConnon said after the meeting that rural supply stores had been busy in recent weeks, a sign that clients appeared to be giving the company the benefit of time before judging its success or failure.

The focus had been on ensuring the merged entity retained its strength, with minimal impact on the business and none on clients.

"If we succeed with our clients, we will succeed with our business."

McConnon expected the company to vacate Wrightson's Porirua head office by next March.

The corporate office is moving to Christchurch and account processing to offices in Napier and Dunedin.

He said it was too early to say how many of the 2700 staff inherited with the merger would keep their jobs, and added it was premature to judge which of the 20 South Island centres where both companies had rural supply stores would close.

A 100-day schedule has been adopted to bed in the merged company and create a divisional business structure which utilises the entity's size and strength, as well as a district management system which gives clients access to decision-makers.

McConnon said the proposed structure adopted the best elements of the way PGG and Wrightson previously operated.

PGG-Wrightson will operate six divisions - livestock, wool, rural supplies, finance, real estate and seed and grain - with three business units: Agri-Feeds, which imports and distributes animal feed and animal health products; Agriculture New Zealand Training, a private rural training organisation; and Irrigation and Pumping.

It has also created a joint venture with specialist Merino wool marketing company, New Zealand Merino. A remit to increase directors' fees from $400,000, previously paid to PGG's eight directors, to $875,000 for PGG-Wrightson's 12 directors, was passed without dissent.

Earlier, the former chief executive of PGG, Hugh Martyn, said it achieved a 6 per cent increase in sales, breaching the $300 million mark for the first time.

The $17 million tax-paid profit was down $750,000 on the previous year, due in part to the poor performance of its Irrigation and Pumping division.

- NZPA