Smiths grow business they call home

Partnering with Aquila investors has allowed Stephen and Sheryll Smith to continue to grow the farm business that they call home.

The Smiths and their previous equity partners had been trying to sell 46 South in Western Southland for some months when Aquila approached them with a proposal to purchase 80% of the business.

Stephen says Aquila had the capital to release their previous equity partners and it was willing to retain the Smiths as equity managers.

“It was a huge opportunity for us to be in business with new people, who have the same vision for 46South as us.”

The Smith’s met Aquila CEO, Detlef Schoen in November 2009 and then some of his German investor clients when they visited in February this year. Stephen describes the investors as a breath of fresh air,

“They are excited about our skills and how we can help them to be part of the New Zealand industry”.

Detlef has primary responsibility for overseeing New Zealand investments. He says the Smiths impressed  him straight away.

“Here was an enthusiastic and skilled couple that had the rug pulled out from under their feet through events beyond their control - and all that was needed was to push the rug back plus give the business a capital injection to allow it to reach its goals.”

Aquila’s purchase was approved by the Overseas Investment Office in March 2010. The 46South partnership has two Directors, Stephen and an independent director and New Zealander as its Chairman, Cliff King. Cliff is a Director of MyFarm which facilitated the partnership between the Smiths and Aquila and has the farm management contract for 46South. Stephen says the business benefits from the well structured and transparent relationship between partners and he enjoys the support of MyFarm supervisor, Terry Carr.

Stephen says in its first 6 months the partnership has taken on a new lease block, increased cow numbers and is about to undergo conversion of the 120ha runoff. This conversion which includes construction of a new cowshed will see $2million spent with local contractors. Staff numbers will also increase from 4 to 5 fulltime staff following the conversion.

The 2010/11 season is the Smith’s 9^th on 46 South. They have grown the business from  450cows in the first year of its conversion to 890 this season and the potential to be milking 1250cows next winter.

“We want to grow, that’s why we got involved with these people. We are very passionate about 46 South it is our life.”