Great South: We absolutely acted in Southland's best interest
“In their view, Canterbury is a better location for the plant, which they are entitled to do.”
Great South’s board chair says its decision to support shifting a planned oat milk plant away from Southland is about protecting the value of its company shares.
A carbon-neutral plant-based milk processing facility had initially been announced for Southland by company New Zealand Functional Foods [NZFF]. Great South is a 49% shareholder of NZFF.
However, there was public outrage in July when it was revealed the oat milk plant will now head to Canterbury. That’s despite Great South - previously Venture Southland - leading the project for a decade.
Great South board chair Ian Collier and Great South CEO Chami Abeysinghe fronted the Invercargill City Council on Tuesday for a please explain. That came after Cr Ian Pottinger put up a Notice of Motion asking that they do so.
The Invercargill City Council is a 48% shareholder in Great South.
Collier acknowledged that he too was hugely disappointed the plant would head elsewhere. Although he confirmed Great South did support the resolution for the move.
Great South is a shareholder in NZFF alongside K1W1, which is Sir Stephen Tindall’s investment company.
Collier said NZFF is a vehicle to raise capital and it has now attracted a potential “cornerstone investor”.
That potential investor felt the plant was better suited elsewhere.
“The scope of the plant has changed radically from where it started and to be honest the potential investor has brought a lot to the table in that respect,” Collier said.
“In their view, Canterbury is a better location for the plant, which they are entitled to do.”
Pottinger pointed to Great South’s constitution, in regard to acting in the best interest of Southland.
He quizzed Collier whether Great South had in fact acted in the best interest of the province by supporting the resolution to not proceed with the construction of the plant in Southland.
Collier believed they were acting in Southland’s best interests.
“We absolutely believe we were,” he said.
“We did support the resolution that was taken because we have a 49% shareholding in something that is worth something. Those shares have a value attached to them.
“What the value of those shares is and whether that is realised is still under negotiation.”
Cr Grant Dermody asked Collier if he was able to indicate what sort of return Great South may get on its shareholding.
He said he wasn’t able to at this point.
Invercargill Mayor Nobby Clark said he had spoken with both Sir Stephen Tindall and the potential overshares investor.
He said while there was information he could not share, it did give him some peace of mind.
Clark was confident Great South would get a return on its investment.
“From my perspective, there is a medium return, not low, but not high.”
“From my quick analysis of the financial figures of what Great South might have put in - and Venture Southland before it - by the way of staff hours I guess, and you work out what our shares will be worth, we’ll be on the right side of the ledger.”
The other upside was that Clark felt the project did portray Great South as a good development tool that others may want to work with in the future.
Although not all councillors were as glowing of Great South at the meeting.
Cr Peter Kett was particularly scathing. He wondered why others were able to hold a 51% shareholding in New Zealand Functional Foods and said Great South had given up power.
He also questioned the value Great South has provided Invercargill.
“For over 25 years our city has invested a lot into Great South - Venture Southland prior - and I believe we are not getting bang for our buck.
“I’m annoyed, very annoyed, and very disappointed that employment opportunities have been lost for a lot of Southlanders.”
Clark advised Collier he did not need to respond to that comment.
Be pretty hard to think this has been done in the best interests of the ratepayers (funders or Great South) when it seems only one option has been explored to progress the project.
Have the farmers been offered a model along the lines of our local meat companies or was there any investigation of going to the public to generate funding.
I get heartily sick of the condescending attitude that we know best, and you just have to wait to see. If people want to use public funds, they should be prepared to accept public scrutiny.
Thanks to Cr Pottinger for opening this up. The mayor has some secret info that gives him peace of mind and Ian Collier believes he was acting in our best interests. The only best interest mentioned was shares potentially going up. No jobs, no oat milk factory, years of research and investing of ratepayer dollars just to say we will get return on shares in a factory in Canterbury. Where are the jobs, the employment opportunities, the wider community benefits the promotion of Southland as a place to invest in etc. I suppose the mayor and Mr Collier did their best to make silk purses out of a sow's ear."