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Growers Must Decide Investment in Wool Companies


12 August 2001 PR122/01

Growers Must Decide Investment in Commercial Wool Companies

Farmers at NZ Meat & Fibre Producers' forums around New Zealand have given the NZ Meat & Fibre Producers' Executive a clear message that growers want to decide where their reserves are invested

"For years the Wool Board has made investment decisions on behalf of growers - growers are now questioning what they have got to show for it? They are not convinced that the Wool Board will make the best investment decisions," said Mr Taggart, Chairman of NZ Meat & Fibre Producers.

"Of particular concern is Ovita, the biotechnology company recommended by the McKinsey report. This is clearly a commercial company and as such it should raise its capital like any other commercial company - through a capital share issue," said Mr Taggart.

"If the returns from Ovita are going to be so great, farmers will rush to invest. If farmers don't invest then the Board should consider it a clear signal that they don't think Ovita is a wise investment."

"Why is the Board so reluctant to raise capital via a share issue? If the Ovita business proposal is sound and provides the kind of return such a high-risk investment should, the share issue should be over-subscribed."

"Over the past five weeks we have discussed Ovita with farmers around the country. They have given us a clear message that they consider Ovita to be a commercial company and that commercial principles should apply. Many farmers simply do not want their reserves invested in Ovita and believe that the Wool Board should not be taking that decision out of their hands by compulsorily investing reserves in this company."

"The reserves belong to growers, many who have multi-million dollar investments in their businesses. Farmers make significant investment decisions on a daily basis, and now they are saying that they, as growers, want to make these commercial investment decisions and not the Wool Board."

"When is the Wool Board going to start listening to growers?" questioned Mr Taggart.

ENDS

For further information: Murray Taggart (025) 249-9494 or (03) 312-5769 Maxine Yule (04) 473-7269

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