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$16 million nationwide strategy yielding results

3 November 2004

$16 million nationwide strategy yielding results

Ballance Agri-Nutrients is half way through its $16 million nationwide distribution network expansion programme establishing 34 new or upgraded distribution outlets, and ongoing investment to inject 20 new technical sales reps and 12 store personnel.

Ballance General Manager Sales Graeme Smith says the co-operative has spent the past 18 months rolling out its comprehensive distribution network strategy, which is designed to deliver better customer service.

With another 18 months to go before the project is complete, Mr Smith is very pleased to see a positive impact already.

“With more than a year’s worth of research and planning backing our strategy we were always confident it would yield results. We are, however delighted to see early signs that it is having a positive impact. Not only were our 2003/04 results showing growth in fertiliser tonnage sales in many regions, but first quarter sales for 2004/05 show further improvement.

“I believe we are performing well at this early stage because the strategy is fundamentally good business – putting the customer first – and taken to a national level. Beefing up the distribution network consolidates our position as New Zealand’s leading specialist fertiliser co-operative.

“The strategy focuses on three areas: reps, stores and merchant relationships. We sought to build a distribution network and sales team that continually meets our customers ever changing expectations. Through this Ballance can deliver to its shareholders, customers, and supplier partners what they want, when they want it, and how they want it. Our product is more accessible, we have greater control over the quality of the product and can better deliver our growing know how as a specialist fertiliser company.

In addition to the distribution investment, Ballance is reviewing the farmer-to-rep ratio in every region to achieve an optimum balance in order to provide desired levels of support for farmers, while managing costs. Sales territories have been modified and new reps appointed to improve service levels in the Waikato and Bay of Plenty where intensification has seen a steady increase in farmer numbers. In the lower North Island and central South Island, it is more a case of an expanding customer base requiring more staff to service.

New service centre and consignment store sites are being investigated throughout the country, and in many cases work is either complete or well underway (see table attached). Bay of Plenty’s existing Mt Maunganui site will be supplement by another in the area, to ease growing congestion and make Ballance fertiliser more accessible.

Ballance is also installing 12.5 tonne urea silos on selected farms across the country. These silos enable farmers to spread urea when conditions are right. It brings significant time savings for farmers, improves product effectiveness, and as a result is also environmentally beneficial.

Ballance is the only major fertiliser co-operative that continues to work with and through merchants such as Wrightsons, RD1, CRT, Pyne Gould Guinness, Farmlands and others. It believes this is still a key platform for distribution, is an essential investment in the local communities, and ensures a broad base of people skilled in the fertiliser market. With most merchants now selling Ballance fertiliser at trade prices, costs are transparent and price changes are shared with all customers and shareholders.

Merchants provide an easy conduit through which farmers can access all Ballance fertilisers and at the same time receive financial assistance to make these seasonal requirements possible.

“Ballance believes the continued success of New Zealand’s agricultural industry lies in partnerships – it’s also the heart of being a co-operative. We are happy with our relationships with merchants, and our strategy is to continue investing in training to ensure our merchant partners are up to speed with Ballance news, including our latest products,” Mr Smith says.

Mr Smith says Ballance’s process of continual improvement will ensure ongoing evaluation and adjustment of its network and service delivery once the initial distribution network project is complete.

“True customer service is about adapting to expectations in order to meet and exceed them. That is the essence of the distribution strategy, and Ballance’s business ethos.”

Work complete or underway:
North Island
Site Work Status
Netherton New and upgraded Service Centre Work underway, operational 02/05
Waingawa Service Centre Operational
Stratford Service Centre Operational
Fielding Service Centre Work begins 10/04, complete 03/05
Pio Pio Install Consignment Store Transit bins operational

Hari Hari/
Whataroa Consignment store Operational
Dannevirke Consignment Store Operational
Featherston Consignment Store Operational
Dargaville Expand operations Operational 02/05
Pukehina Consignment Store Operational
Irirangi Transit Store Operational
Morrinsville New Despatch Plant Operational

South Island

Site Work Status
Lumsden Upgrade to Service Centre Work begins 02/05
Timaru Expansion of existing facility Surveying site
Owaka Consignment: four bins Operational early 12/04
Omakau Consignment: six bins Operational early 12/04
Te Anau Consignment: four bins Operational early 12/04
Rangiora Consignment: two bins Operational early 12/04
Rai Valley Consignment Operational early 10/04
Kaikora Consignment Operational early 10/04
Murchison Consignment Operational early 10/04
Rakia Consignment Store Works started: operational 01/05
Balclutha Consignment Store Construction complete 11/04, operational 12/04
Makikihi Consignment store Bins built and operational
Oturehua Consignment Store Operational
Fairlie Consignment Store Operational
Oamaru Consignment Store Operational
Gore Consignment Store Operational
Ranfurly Transdump Store Operational


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