Friday 31st March 2017
|Text too small?|
Government-owned farmer Landcorp was rebuffed by State-Owned Enterprises Minister Todd McClay from changing its name to align its business with its new 'Pamu' brand, amid claims it was "a waste of time and money", according to documents released under the Official Information Act.
The company was initially called Land Corporation when it was created as an SOE from the Department of Lands and Survey in 1987, and the name was later changed to Landcorp Farming in 2001. In September 2014 the company wrote to McClay and then Finance Minister Bill English asking to change its name to 'Pamu Farms of New Zealand', to better reflect its new strategy of moving away from producing large volumes of mass agricultural commodities and toward developing more specialised high-value contracts.
"The (Landcorp) name implies land ownership and corporate farming, neither element of which is popular nor is consistent with the image Landcorp is seeking to develop," chair Traci Houpapa said in a September 2014 letter to ministers requesting approval for the name change. "It is a decidedly '1980s' name from a particular period of New Zealand corporate history. We believe that the name is out of place in a modern commercial environment and detracts from the company."
Houpapa said Landcorp had assessed more than 700 options before settling on 'Pamu', which means "to farm" in Maori, and it believed the new name was simple, clear, and reflected the company's position as the largest farmer in New Zealand.
"It is authentic to New Zealand and to the company, yet speaks to a fresh, new approach to farming," she said. "It is conservative on one hand, yet courageous on the other."
However the documents show that there were doubts about the value of changing the company's name from the outset, with Treasury officials noting they were sceptical about how value would be gained from a change in company name to justify the cost and resources needed to implement it. Before formally requesting the change, Landcorp was told by the ministers that it must be done "at the lowest possible cost".
Landcorp appeared to take on this feedback, advising that the cost of making the name change was "relatively minor", involving stationery, a sign on each farm and in Wellington, and a refreshed website.
Despite its misgivings, Treasury didn't formally oppose the move, saying it had "no explicit view on the proposed new name of the company", and recommending McClay approve the change, which required cabinet's approval for an Order in Council to update 10 relevant pieces of legislation.
"Whilst we are sceptical that a change in the company's name will result in improved financial returns to the company or the Crown, we do not see value in trying to block the proposal at this point in the process," Treasury manager, governance and performance, Fiona Chan said in her October 2014 report to Ministers on the issue. Any risk that the move would be seen as the first step towards privatising Landcorp could be mitigated by reiterating the government's policy that it had no intention of selling Landcorp, she said.
However, McClay shot down the plan, disagreeing with the Treasury's recommendation, with a handwritten note on a proposed cabinet committee paper: "I think this a waste of time and money!! and efforts could better be spent focusing on core business."
Landcorp hasn't paid a dividend to the Crown for the past two years, as it took on more debt to convert forestry land to dairy farms amid a milk price slump, causing some friction with the government which wants regular payments. It's since pulled back on dairy farm conversions, is selling non-core properties to reduce debt, and is focused on lowering its operating costs and bolstering its brand.
In a letter to BusinessDesk when releasing the documents, McClay said that while he declined to approve the name change, he agreed with Landcorp that branding is an operational decision for the board, and he understood that Landcorp is using Pamu as part of its branding.
Landcorp confirmed it launched Pamu as a product brand in 2015. The company told BusinessDesk that while Landcorp Farming is the legal entity and formal name of the company, it uses Pamu as its promise of quality and product brand to differentiate its products and the way it farms.
"We are continuing to build value in the Pamu brand and will increasingly use it to showcase our farms, people and organisation as well as our niche products," the company said.
Landcorp official corporate correspondence now prominently features the Pamu Farms of NZ name, with its official Landcorp name in a smaller font as part of its contact details. The Pamu Farms of NZ name also features prominently on the company's website.
In a briefing paper to the government, Landcorp had said the change was aimed at "shifting us from a faceless government-owned corporate to a clear industry leader, redefining the sector for the benefit of the whole country."
No comments yet
NZ dollar eases on technical factors, buoyed by higher dairy prices
RBNZ eyes Westpac Australia money laundering failures
Heritage buys Golden Healthcare; not mystery Metlife suitor
Alliance margins improve as swine fever boosts global meat prices
RBNZ eyes Westpac Australia money laundering failures
Precinct eyes new developments as Commercial Bay keeps to revised schedule
End to Tower's three year dividend drought in sight
Vital Healthcare's manager appoints new independent director
Argosy lifts first-half profit 15.2% on valuation gains
Metlifecare attracts 'credible' bidder after biggest trading day in 2 1/2 years