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Farmlands takes hold of Horowhenua Region

December 5 2005

Rural retailer Farmlands takes hold of Horowhenua Region

Rural retail co-operative Farmlands Trading Society continues to strengthen its position in the North Island market today following the purchase of Allfarms Ltd.

Farmlands chief executive John Newland said today the acquisition would double Farmlands annual turnover in the Horowhenua region to more than $10 million and give it a leading market position.

All 149 Allfarms shareholders will become Shareholders of Farmlands and Allfarms staff will be offered the opportunity to join Farmlands

Mr Newland said the opportunity to purchase Allfarms was timely and fitted with Farmlands growth strategy.

“This acquisition has been made at a time when other industry players also sought to purchase the business. We are delighted that Allfarms’ shareholders saw additional value in their business becoming part of Farmlands and their opportunity to become shareholders in our cooperative,” Mr Newland said

“Becoming part of Farmlands also offered Allfarms shareholders greater economies of scale. They would now share in the benefits of belonging to a co-operative with a customer base that expands well beyond dairying including pastoral farming and horticulture.

“There is a strong cultural fit between the two businesses, based on their co-operative heritages, the importance of people and teamwork.

“We are both focused on meeting the needs of farmers and growers in the Horowhenua region through competitive prices and maximising shareholders’ farming profitability,” Mr Newland said.

Allfarms chairman Geoff Lewis said shareholders had agreed to the sale at a Special General Meeting on November 30.

Mr Lewis said the sale was a very positive outcome for shareholders and the community.

The rural retail market is extremely competitive environment and Farmlands is extremely well supported by the rural sector and has a similar culture to Allfarms, Mr Lewis said.

Allfarms currently operates two rural retail stores in Levin and Otaki which would be integrated into the Farmlands business.

Farmlands would move from its existing Levin store, where the lease is due to expire, into the Allfarms building, however but it would not retain the Allfarms Otaki premises.

Farmlands recently reported record sales of $305 million and record membership.

The co-operative has had steady growth over the past three years and had a $4 million before tax profit for the 2005 financial year.

Farmlands has also benefited from the acquisitions going on in New Zealand’s rural retail sector.

In the past two years Farmlands has opened two stores in Taranaki (Stratford and Hawera) and another in Pukekohe – its first move into the Auckland market.

ENDS

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