Biggest fertiliser firm expands

Ballance will take majority share in new company formed by merger of two NZ nutrient manufacturers
The country's biggest fertiliser manufacturer and distributor, Ballance Agri-Nutrients, is expanding and diversifying its business by taking a majority stake in newly merged animal feed companies.
The latest move, taking place on June 1, will add $50 million, or an extra 7 per cent, to annual revenue of nearly $700 million and increase staff numbers by 45, now totalling 700 around New Zealand. There are 100 sales staff on the road each day.
Two animal nutrient manufacturers in each island - Morrinsville's Seales and Winslow Feeds in Ashburton - are merging and Mount Maunganui-based Ballance will own 51 per cent of the new company, Seales Winslow.
It means Ballance is now covering the nutrients field from pasture to supplements. "It's a big acquisition for us," said Ballance chief executive, Larry Bilodeau.
The existing shareholders of privately owned Seales and Winslow Feeds will take up 49 per cent and retain their own manufacturing operations and distribution network.
A new board of directors will be formed, with an independent chairman, two Ballance representatives and one each from Seales and Winslow.
Mr Bilodeau said the deal - negotiations began in November - fitted in with Ballance's vision of improving productivity on farms, whether they were dairying, deer, sheep or beef.
"Pasture-based agriculture still drives the New Zealand economy and to get more out of the industry we need these sorts of high-performance products [compound stock feeds]," he said.
"Now, Ballance will be involved with plant nutrients [fertiliser] and animal nutrients [compound feed]. One way or another we will be feeding the animals. It is a natural extension of our business.
"If farmers want to increase their herds and their productivity, and they are running out of grass or affected by drought, then they need to bring in bulk feed like palm kernel or more nutritional compound feed."
Mr Bilodeau says Seales Winslow produces compound feed customised for animals and farms, and containing proteins and carbohydrates. The feed will include wheat, maize or barley, and other ingredients such as tapioca, canola, soya meal, and seaweed. That is combined with molasses and processed into pellets for the animals to eat.
"The farmer can look at the nutritional needs for his animals and get a specific brew made up. They are like vitamin supplements and they do drive productivity," Mr Bilodeau said.
Seales Winslow, producing about 80,000 tonnes a year, delivers direct to farms from its processing plants, and also sells through rural merchants.
Mr Bilodeau predicted compound feed sales could grow at least 20 per cent over the next five years.
"The industry in New Zealand is in its infancy, unlike Europe," he said. "It costs a lot to buy a farm nowadays and for the farmer to pay it off he needs to increase his stocking rate and bring in supplementary feed."
Over the years Ballance, formerly Bay of Plenty Fertiliser Co-operative, has been busy expanding. It produced 1.173million tonnes of fertiliser in the year ending May 2010, for revenue of $692.88 million and a profit of $20.8 million.
The present financial year will be better, with farmers again spending money on fertiliser. Ballance has already topped the 1.17 million tonne mark.
"It's been a good year for us," said Mr Bilodeau. "There's the expression 'don't waste a recession' ... we have strengthened our business on all fronts, the balance sheet and the whole thing."
Ballance plunged to a group trading loss of $5.9 million in the year ending May 2009, after international fertiliser prices rose and the co-operative was left holding too much stock.
The Tauranga manufacturer bought the Kapuni ammonia-urea plant from Fletcher Challenge and the fertiliser works in Whangarei from FERNZ, and also merged with Southfert in Awarua near Invercargill.
Ballance bought into Summit Quinphos, the country's third largest fertiliser company that started out in 1988, and Ballance now has 100 per ownership. It also owns agricultural aviation company, Super Air.
Last month Ballance took a 51per cent shareholding in Feilding-based Farmworks Systems to expand its own online farm information and management tools, under AgHub.
Ballance and Summit Quinphos have 50 company-owned distribution outlets and up to 90 consignment stores throughout the country.
In another move, Mr Bilodeau said Summit Quinphos would soon be re-branding and changing its name. Summit Quinphos has just released a patented new product, pHased S, which enables farmers to easily apply a combination of elemental sulphur, Agrotain-treated (controlling nitrogen loss) urea and lime.
The combination is a cost-effective option for farmers wanting to offset soil acidity and boost pasture production, especially if they are reliant on aerial top dressing, said Summit Quinphos general manager, Willie Thomson.
The new product, in a compacted granule, is being produced at Te Poi on the other side of the Kaimais.