Breeding better farm returns

Stuart Gordon

During Stuart Gordon's time in charge of New Zealand's biggest stock breeding company profits have grown from $2.6 million to $10.7 million, revenue is up 32 per cent to $110 million and the return on capital has increased from 3.6 per cent to 10 per cent.

Gordon, chief executive since 1998, has overseen Livestock Improvement's transition from a subsidiary of the New Zealand Dairy Board to a listed farmer-owned company.

"To take it from a culture of industry good to a commercial culture and then the listing on the stock exchange - they were exciting times," he says.

He sees this evolution the most satisfying part of his tenure, yet looking back is surprised by how long it took.

He says it took four or five years to get the culture to a point where he was happy with it and now the company measures it every six months to make sure it's on track.

This review includes asking employees if they understand the direction of the business and where their job fits into the plan.

"The gap between what our staff think is ideal and where they think the company is on a whole range of attributes has never been better."

Gordon was travelling the country visiting employees last week before his resignation takes effect this Wednesday.

He thinks the company has the foundations for future success.

"You can have strategy, you can have the right technology but it's people that actually do it," he says.

"If they believe in the company and the vision of it they'll lift their game, and you have to get around and explain that."

During his time Gordon would like to have seen a faster development of international strategy and a greater sharing of knowledge among farming sectors.

"We have a lot that we can [do to] give value to other species in New Zealand and I think there's some opportunities in there that could be looked at," he says.

But the greatest task facing his successor is the commercialisation of biotechnology.

"I don't think we really understand how we can capture real value back for our owners yet, internationally in our biotechnology strategy and that's a real challenge."

For Livestock Improvement biotechnology involves identifying the genes in dairy cattle that relate to traits including production, fertility and resistance to disease.

Gordon says the company spends about $9 million each year "proving" 300 bulls, which involves siring daughters to identify the best 10 bulls for widespread use in the industry.

This method has been the standard approach since the 1960s, but using biotechnology to identify genetic traits could change everything.

"Instead of waiting until these bulls are proven, which takes five years, suddenly you'll know just as yearlings which are the best sires," he says.

"In fact if you take a bit out of an embryo you'd know which are the best."

The laws protecting patents in the biotechnology field are not always clear and as a consequence the value can "leak".

But he is not tempted to stay on and face these new challenges.

"There'll always be challenges," he says. "We'd be sitting here in five years time if I was CEO and be talking about another technology."

Having recently turned 50 Gordon is not yet ready to retire and plans to focus on personal business interests.

And although he'll miss working with his colleagues and the farming industry, he's looking forward to spending more time with his family.

"I'm pretty family orientated and [as chief executive] you are away lots of the time," he says.

"The ability to sit down with your daughter and read her a story at night - those sorts of things are the precious things."

Born in Gisborne, the son of a postmaster, he grew up in the Waikato where as a schoolboy he started working on local farms.

"That was the way to earn some money ... line up the bales," he says, " ... and as you grew stronger you got to get on the truck and finally if you made the top of the team you got to drive the truck."

Gordon lives with his family on a 430-head dairy farm outside Hamilton, where his work as head of Livestock Improvement can be put into practice.

* Livestock Improvement chairman Stuart Bay said that an international search was underway to replace Gordon.

In the meantime former Dairy Group chief executive Graeme Milne would be acting head.