Investing in the manufacture of low-emission nutrients
Ballance’s ongoing strategy to focus on locally manufactured products is the key driver for the co-operatives strong 2022 financial year performance.
As a result of this solid performance, the Ballance Board, is pleased to announce a shareholder rebate of $30 per tonne. This equates to an aggregate total of $37m returned to farmers and growers.
The Board has elected to retain $56m to future proof the cooperative as we transition to a low emissions carbon-neutral future for locally manufactured nutrients.
“Investing in reducing our manufacturing emissions, and maintaining our assets is how we can continue to provide a reliable source of nutrients for current and future generations of kiwi farmers and growers,” says Duncan Coull, Ballance Chairman.
“We passed on $54m of price benefits to our customers to ease the impact of rising commodity prices internationally. Along with local manufacturing, we assured affordability in a global context and reliability of supply in reasonably challenging circumstances” says Mark Wynne, Ballance CEO.
Ballance’s strong fiscal year is thanks to smart investment and excellent contract terms with supply partners. In the 2022 budget year Ballance invested $95m into a large capital programme to support customers across multiple sectors including the rebuild of the Whangarei hub.
“In Kapuni we have a favourable long-term gas supply contract. This enabled the supply and manufacture of competitively priced urea, about 30% of our total volume sold. In other parts of the world, the rapid energy price increases forced the closure of fertiliser factories, creating supply pressures, however our contractual arrangements have enabled some of the lowest priced urea in the world over the last six months,” says Mark.
“Our long-standing and trusted relationships with our global suppliers helped to mitigate ongoing supply disruptions and the unpredictable price of raw material, product and freight, however, by far the biggest advantage we had, was our strategy to focus on local manufacture.
“Our remaining inventory has been expensive to procure in FY22. We have maintained a solid balance sheet which will help to insulate us from the impacts of the market as it inevitably corrects.
“By using our collective strength, and bolstering our balance sheet, we can navigate the challenges of today, while realising future opportunities,” says Mark.
Ballance is a purpose-led organisation with a culture of care for people and communities with direct contribution to local economies and a highly engaged team of 800 employees nationwide.
“We are proud of the essential role we have in supporting New Zealand farmers and growers to be future-ready. We will continue to evolve and adapt to achieve surety of nutrient supply for our shareholders,” says Duncan.
For further information:
Media - Aimee Driscoll - 027 487 9656
Shareholders - 0800 267 266