Farmlands promises to deliver merger benefits

Last updated 16:48 17/03/2014

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Rural services co-operative Farmlands will proceed with its plan to centralise processing functions into its Dunedin business centre and administrative support in Christchurch.

A year after combining CRT and Farmlands the $2 billion-plus turnover co-operative is taking steps to honour its promise to shareholders it would deliver $38 million in benefits from the merger.

The benefits are expected to come from better buying, leveraging off strength areas of both businesses and removing duplication in business systems and resources.

After taking the proposal to integrate the business to staff last month, Farmlands announced today it would go ahead with basing most of its support network in the South Island.

Its Hastings site would become the Hawke's Bay-East Coast regional centre for customer functions.

Farmlands management are entering stage two of the consultation process with individual staff which they hope to complete by the end of May.

The leadership team would not elaborate on the scope of the second stage or if positions would be disestablished. Farmlands said it could not comment further on a potential outcome until consultation with staff was completed.

Farmlands said the changes, if adopted, would account for 42 per cent of the total budgeted merger benefits, or more than $16m, over the first three years of the merged business.

In the first year after the merger the co-operative had concentrated on laying out its new business model by forming a new executive team and capturing early opportunities provided by its increased business size.

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