WELLINGTON: Livestock Improvement Corp have set a “roadmap” to sound out its farmer-shareholders about the possibility of raising capital to drive growth aimed at achieving $1 billion in revenue by 2025.
Livestock Improvement (LIC), which supplies three-quarters of the New Zealand dairy industry with bull semen, will remain under farmer ownership and control, regardless of what happens with its capital structure, says chief executive Wayne McNee. “Basically we want to go and talk to farmers about the growth strategy and the fact that at some stage it will need some funding to deliver it,” McNee said. “There is no urgency with that, and we are absolutely committed to remaining a co-operative, but there are some options with the co-op that could allow us to raise some capital at some point.”
Aside from genetic material, LIC’s subsidiary – Dairy Automation Ltd (DAL) – provides milk-testing sensors that measure fat, protein, somatic cell counts and volume, and present real-time data while a cow is being milked. LIC, which last week posted a 10 per cent gain in first-half profit to $29.7 million, has formed a joint venture with Israel’s’s SCR – a cow monitoring and milking intelligence solutions company. SCR was bought by livestock tag company Allflex – a company with New Zealand origins – last December for about US$250 million.
SCR’s Heatime will be available to all New Zealand dairy farmers from LIC, with LIC’s Protrack farm automation systems. McNee said LIC was looking at acquisitions in its bid to reach $1 billion revenue and had one under consideration. “We are doing due diligence at the moment and we are looking at other opportunities in line with our strategy,” he said.
“We will have to do more mergers and acquisitions to deliver that.” As it stood, LIC’s existing capital structure was not an impediment because the company did not carry any debt. In March, LIC will launch a prototype of its Protrack, MINDA stock management systems in Ireland and Britain – the first time in many years that LIC has attempted to export technology over and above its existing genetic material export trade.
