By PHILIPPA STEVENSON
Like anxious parents, dairy company shareholders should be counting the digits on a newly delivered mega co-op business plan next month - nine months after the seed was sown.
The chairman of the Dairy industry establishment board, Graham Calvert, said the five-year forecast of benefits from a merger
of up to eight companies and the Dairy Board should be in farmers' hands by early February.
The figures will be the first hard facts farmers have seen since the Dairy Board launched the industry integration proposal last May, claiming it would boost earnings by $300 million a year.
A difficult gestation has been marked by fraught negotiations between the major co-operatives, Kiwi Dairies and New Zealand Dairy Group, whose coupling is essential to the success of the plan.
Farmers and company directors are looking to the plan to settle some dust and show the way forward.
Mr Calvert said the forecast would form part of a second application to the Commerce Commission, also now being worked on and expected to be submitted in mid-March.
However, he said the application would not proceed if the business plan did not satisfy farmers.
The commission rejected the industry's first proposal after finding it caused dominance in the market for farm milk and some retail products.
Mr Calvert said more than 20 people, including 10 senior company and Dairy Board executives, had worked through the Christmas holidays to complete the plan, in what he called a major effort.
There had been suggestions that the Dairy Board was loath to supply figures which could potentially end up in the hands of a competitor, should the merger plan fail, but Mr Calvert said the team had all the figures it required to make its calculations.
If the mega co-op idea dies, the expected alternative is for the industry to split behind Kiwi and Dairy Group, with one company incorporating the board as its marketing arm.
For it to live, approval has to be obtained from 75 per cent of shareholders and the Commerce Commission before September 1. Legislation enabling industry changes to occur lapses on that date.
