SEEKING GROWTH: Seeka does not have much of a grower base in the post-harvest sector.
SEEKING GROWTH: Seeka does not have much of a grower base in the post-harvest sector.
Tightening margins in the post-harvest sector of the industry have prompted Seeka Kiwifruit Industries to come up with a shareholder plan to tie growers closer to the company.
Seeka, which listed in 2005, does not have much of a grower base in the post-harvest sector, although some growers are alsoshareholders. Now the company plans to offer growers who agree to pack with Seeka for three years shares based on their throughput.
"If you sign up for three years, for every tray you pack with us you get a percentage of Seeka shares issued to you," said Seeka chief executive Michael Franks.
"You just have to be a grower, it doesn't matter whether you're an existing shareholder or not. We will offer have a mechanism whereby they can take shares in the company and that facilitates alignment and loyalty."
Mr Franks said the rationale was that if the company did not compete by providing a facility for ownership, it risked losing packing volume in a market that was expected to remain extremely competitive until kiwifruit volumes start to increase from 2015 onwards.
He said that any effect on the company's equity was expected to be minimal, given that the company's asset backing per share was $4.05 against a share price of $2.37.
"So long as we procure enough grower packing volume through the scheme, our earnings per share could even go up," he said.
The new grower share scheme will cover the supply years 2014, 2015 and 2016, with the first tranche being launched in September this year.
