End of a very good alliance

22:41, Jul 31 2014
Grant Cuff
GRANT CUFF: The carefully spoken, bespectacled chartered accountant admits it's an all consuming job.

Never one to hog the limelight, Grant Cuff will be quietly planning a low profile exit when he steps down from the Alliance Group.

Scooting out the back door might be a bit difficult though. The Invercargill-based co-operative, owned by about 5000 farmer shareholders, will surely want to see him out in a manner respecting the chief executive's 33 years of service in the meat industry and the last 24 years of those with Alliance.

Cuff's leadership is due to end at the close of the co-operative's annual meeting in December.

Gone will be the pressure of heading the world's largest processor and exporter of sheepmeat and sizeable beef and venison handler.

The carefully spoken, bespectacled chartered accountant admits it's an all consuming job. Even on holidays the role occupied his thinking and he never fully got away.

He has enjoyed, and will miss, working with the people - farmers, management and staff.


Less enjoyable was dealing with media and representing the company on the stage.

When called upon though, he fronted the big issues.

A tough day was letting 250 staff know in 2011 that their days with Alliance's Sockburn beef, venison and pig processing plant were numbered soon after the Christchurch earthquakes.

Sockburn wasn't profitable, partly a victim of plant over-capacity and fewer animals to kill from increased dairying and a business decision had to be made. That didn't ease the decision.

Cuff vividly remembers the day the bad news had to be dished out.

He concedes he's not the look-at-me, look-at-me type. He's happiest behind the scenes and deflects any credit for Alliance's strong balance sheet to others.

"We have a wonderful team here and they should get the recognition they deserve and it's not right for me to take credit."

Two digits and the rising fortunes of sheep and beef farming were the catalyst for Cuff to call it a day.

Red meat's brightening outlook at a time when dairy prices have taken a turn for the worse provided the assurance for him that he would be leaving the company in good shape for a successor.

Ending as chief executive after nearly 10 years also had a neat symmetry for the accountant, who also has a science degree in chemistry.

"When I started in 2005 I gave myself 10 years - that was an expectation I had - and I'm going into my 10th year in a couple of months. I think it's about the right time for the company and everyone involved. The current time feels right for me and the year is better, the balance sheet is strong and the market is not as bad a position with (good) supply and demand."

The timing is also right as the dairy industry has "thoughtfully" lowered it's payout, says Cuff with dry humour.

He will leave confident the co-operative's livestock quality, plants and services are in good shape for the next chief executive.

He leaves knowing his replacement will get as good a start as they can get.

It's unlikely if the pressure will ever come off the next decision-maker. But a better "balance" to red meat's position has him happier leaving.

Cuff, 56, confides he has paid little thought to his next career move. He's too young to take early retirement. Nor is he comfortable working for another red meat company.

The only snippet he will give is that he will take time off for a break after his December departure before finding something to occupy his time.

Cuff's entry to the chief executive job was a baptism of fire - literally. Three months into the job he was forced to deal with the Pukeuri plant in January, 2006.

Fire destroyed two of the meat processing rooms which had to be replaced in a $28 million rebuild including a large modern chilled lamb processing room. The plant remains one of the largest employers in the North Otago area.

Cuff holds this dear to his heart.

"Plants are dotted around regional New Zealand rather than the big centres and we are big employers in small locations. If you look after your assets and give people the opportunity to work - and we unfortunately have had to close some operations - but it gives you an opportunity to have a stable workforce."

Despite the rise of robotic processing, meat companies will always need good people. That workforce is often overlooked, but is the core asset of the company, he says.

Cuff's term has coincided with a tumultuous period of highs and lows for sheep and beef farming. Sheepmeat prices shot away, and with hindsight reached uncomfortably high levels, at over $8 a kilogram for lamb in late 2010 and the market responded by backing off.

Alliance and other companies had to stomach big losses in the 2011-2012 season. For Alliance, which has taken pride on its strong balance sheet, the $50.8 million net loss was its first operating loss in 20 years.

The following year the company turned this around for a $5.6m after-tax profit from a turnover of $1.4 billion.

Lamb prices are now strengthening at a restrained rate more palatable for customers and farmers.

Farmers stand to earn $100 a lamb this season as long as the currency and "usual stuff" continues to co-operate and China carries on demanding sheepmeat.

Less savoury has been the high dollar which has clipped some of the export earnings.

Over the last 10 years much good sheep and beef farming land has gone into dairying. Sheep farmers found it hard, until lately, to stomach perceived imbalances between the sectors in prices and profitability. When things aren't going right the hard gaze invariably goes to meat companies.

Farmers saw the streamlined Fonterra model against the multiple meat companies seemingly working against each other rather than together and attempt after attempt to generate industry consolidation fail.

Cuff has seen it all in his long stint in the red meat industry. In his 33 years he filled roles with Southland Frozen Meat, Challenge Meats, Waitaki International and Alliance.

More lately he is a director of The Lamb Companies group (North America) and chairman of New Zealand Farmers (London), the company's UK marketing arm. These roles he will also step down from when the Alliance chapter closes.

Chairman Murray Taggart uses words like "well-respected", "unassuming" and "steady hand" to describe Cuff.

Cuff has led the company through major change and challenging times and will leave it in a sound position. His deep understanding of the company and the industry and excellent leadership and analytical skills will be missed, he says.

"The impact of the global financial crisis, land use change and a challenging New Zealand dollar have combined to put pressure on our industry. Ongoing changes in customer demands, regulatory requirements and livestock supply have required continual restructuring including buying, reconfiguring and sadly closing plants. Grant's sound leadership and commitment has helped the company overcome these challenges and retain its position as the country's largest exporter of sheepmeat."

Running the Alliance operation had been a constant stream of events, both good and difficult, says Cuff.

"But there was no one thing. The one thing I keep coming back to is the people in our company. We are a pretty stable company and the farming base has been very supportive and that ... gives people the certainty to get on with the job we need to do."

The Press