In 1996 equity partnerships in farming were considered risky business. The few that existed were looked upon with scepticism mainly because of a lack of structure and good fundamental planning, which lead to a higher than acceptable failure rate.
Like many new ideas, equity ventures needed testing. They were being tested in the field, they were working experiments. None of the knowledge and advice that exists today was available to the same degree, every new challenge needed a new set of solutions.
Many hours of discussion and professional advice saw the evolution of structures, which provided a template for individuals used to working alone, on how to do business co-operatively. Although now modified from the original, into documents of substance, these shareholder agreements continue to form the skeleton of the equity ventures we see operating in our businesses today.
In those early days the conversion of Quintag Holdings Limited (the first dairy conversion undertaken by the partners) was seen as pioneering and was a discussion point for onlookers. The integrity behind the sale of shares in the company to an employed manager was questioned. Quintag Holdings Limited exceeded expectations to such a degree that this group, including the farm manager, developed their second Canterbury farm three years later in 1999.
In 2001 three of the original Quintag couples being Jim and Sue van der Poel, Peter and Marg Ormsby and Mike and Andrea O’Connor made a commitment to continue doing business together and formed Spectrum Dairies Limited. They believed the equity venture model had a useful place in the farm ownership suite of opportunities and saw benefit in developing the concept further.
From 2001 to 2007 Spectrum Dairies Limited continued to grow its business to being a major long term shareholder in farming companies. Diversification saw the company expand its farming operations from Mid Canterbury to Southland and Missouri in the U.S.A. During this time shareholder communications, reporting structures, financial monitoring and manager support evolved further. Many of the original shareholder agreements and processes for share valuations were tested to the point where they became more refined to deliver workable solutions. A part time interest became a full time business.
Spectrum Dairies Ltd has used the equity partnership model to run each of its dairy farms. The company has found that this model works extremely well for them. Equity partnerships are designed to provide a vehicle so that a group of individuals can pool their skills and resources to create and crystallise opportunities they may not have otherwise achieved on their own.
Spectrum Dairies Ltd uses this model because it provides positive drivers for all involved, resulting in an atmosphere of success. We take pride of ownership and support capital improvement based on economic viability. Our aim is to set up any venture to perform from day one, which leads to high performance and enhances economic return. Based on sound economic performance Spectrum Dairies Limited supports and encourages business and individual growth through farm ownership.
