Huge questions were put to Great South chair Ian Collier about the loss of Southland’s Oat Milk factory, at the Invercargill City Council meeting on Tuesday.
The ICC is a key funder of Great South and the relocation plan to Canterbury was announced by New Zealand Functional Foods (NZFF) in August, which is raising capital for the factory project. Related: More Feedback Required By Great South Board On Future Funding
Great South is a 49% shareholder and has been working on the project for the past 10 years.
Ian told the meeting that the new potential investor made a conscious decision that the criteria for the plant no longer suited, “and they are entirely entitled to do that.”
He said the scope of the plant had changed radically, and in their view Canterbury was a better location. Great South also supported that decision, even though its intent was always to build it here.
Councillor Ian Pottinger questioned whether Great South was conducting business in the best interests of Southland, and was also being true to its constitution.
“We absolutely believe we were.” Ian replied.
It was important in the decision that it made, to protect the value of its shares, and said he also was disappointed about the relocation.
It was pointed out a company can increase its shareholding, but there was nothing stopping the shares being diluted.
Another important point made by Cr Lesley Soper – where does the intellectual property now sit, given that Great South already has done 10 years worth of work?
Ian said investors had brought in their own intellectual property, and there was discussion around how that initial ICC property could be protected.
Cr Pottinger questioned whether trucking oats from Southland to Canterbury at $80 tonne was economical, but Ian couldn’t answer that, saying that was something to ask the investor.
“Southland oats are the best in the world and will continue to be, “ he assured the meeting. “And we should be optimistic about that.”
It has been said many times that the whole point of the project was to support the diversification of oats in Southland.
Ian defended their position saying “I’m not trying to be cute here but it’s called NZ Functional Foods, not Southland Functional Foods.”
“There is no question in my mind…that Southland oats play a pivotal role, and the investors are absolutely intent on Southland playing an integral part in this.”
Not having that key investor meant it was always a bit of a long shot to get a processing plant in the South, he said.