Kiwi/Northland Merger Supported

17 September 1999

PR101/99

KIWI/NORTHLAND MERGER SUPPORTED

Dairy Farmers of New Zealand Chairman Charlie Pedersen supported of the announcement today by the Directors of the Kiwi Co-op and Northland Dairy companies that they had agreed on merger details.

"Our industry needs strong and decisive leaders and I am sure farmers will be the first to acknowledge the vision behind today's announcement," said Mr Pedersen.

"This is another important step on the road to the mega company. It enhances the possibility by bringing the combined asset base and earning potential of the new entity more in line with the dominant industry player, New Zealand Dairy Group."

"The fact that Kiwi and Northland, the second and third biggest dairy companies in NZ, have been able to resolve the complex financial and legal issues involved in the proposed merger should help considerably in addressing similar issues in the ongoing mega company negotiations."

Mr Pedersen commented that farmers are very realistic about the complexities of forming a mega company and would not be too surprised about today's announcement. "There may well be other interim steps that we have to go through before the industry arrives at a structure that equips it to face the challenges of the next century."

"There is no disputing that the industry must change to address the joint challenges of declining cash returns for farmers and growing production, while at the same time increasing our international competitiveness and retaining farmer control of the industry."

ENDS

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