Based on the advise below, I believe Sanford is about to embark on a serious program to combine all their various recent aquisitions and exisiting operations into a streamlined and well managed operation. I believe this will include younger and fresher management taking on bigger and more important roles in the near future, which is a positive. With Hoki quotas expected to increase significantly over the next 3-5 years combined with significantly increased quota holdings through aquisitions, Sanford will need to invest in upgrading its catching and processing resources and they have a history at doing so at very good prices. Hopefully they will repeat this again BUT they need to make sure they invest in world class equipment. If they do, I would hope this company will go from strengt to strength in the next few years.
Discl: Hold SAN

Sanford Moving Forward

For some time the Board of Directors have been reviewing the development options for the future growth of Sanford Limited. While having been generally satisfied with the results over the last few years and have continued to support growth both by acquisition and direct investment they believe it is now time to start looking at new ways of going forward. Examples of acquisitions and investment include the Jones Group assets, the NIMPL expansion, the Bluff Salmon farm expansion, the Sealord mussel farm purchases, the new inshore vessel San Hikurangi and the expansion of mussel opening technology at Havelock. They remain concerned that we are still subject to significant outside influences that determine our performance. While exchange rates is a significant influence it is not the only one and they believe it is now time to put in place management strategies that build further on our strengths and fundamentally examine the way in which we transact our business from the ocean to our customers in a way that continues our leadership in sustainable seafood. We need to examine our products and processes and our systems of determining what are the best markets and channels to those markets and what product form maximises value. For some years we have struggled to earn our cost of capital and the only way to improve that is to lift our earnings and/or reduce our capital.

The Board has approved a revised management structure that will reduce the number of direct reports to me and allow me to focus on reviewing and developing the 10 or so strategic relationships we have with various companies. At the same time and on a more regular basis these three new roles will expose the Board to senior management tasked with moving the company forward.

Consequently from 1 January 2011 a new structure will be put in place with three direct reports to me.

Those roles will be:-



General Manager Operations

This role will cover all operating divisions of the business. It will include Inshore, Deepwater, Aquaculture, Pacific Tuna, China, and Industry Liaison roles. Division or existing Managers will report through the General Manager Operations position.



Greg Johansson will be appointed to this role and this will involve him relocating to Auckland and a new appointment to the role of Deepwater Division Manager based in Timaru will be made as a consequence of this.



General Manager Marketing and Development

This role will cover all marketing (including the appointment of a marketing team leader), quality management, product specifications, logistics, plus responsibility for Australian activities. It will also take responsibility for the formation of a product innovation and development capability that will look at developing more efficient, effective and sustainable ways of meeting customer requirements.



Vaughan Wilkinson will be appointed to this role which will involve him relinquishing responsibility for the Pacific Tuna and Industry Liaison roles but taking on responsibility for Australia and leading the new product innovation and development capability.



General Manager Finance and Administration

This role will cover all finance and banking, sustainability systems, secretarial and quota administration, accounting and IT systems, insurance, ACC and superannuation and executive support systems. Further development of our software systems and coordinating the expansion of our website and converting it to multi lingual will be an early focus of this role.



Dean McIntosh will be appointed to this role which will also require him to mentor with others in similar roles in similar sized companies.



The establishment of these roles is intended to strengthen the structure of the business and the existing executive will continue to meet with the same attendees and reporting as occurred in the past. These changes in no way diminish the roles or responsibilities of the Division Managers and they and I will continue to interact on a regular or as required basis.



If you have any queries or questions on this email please contact myself.



Kind Regards

><(((☺>

Eric Barratt

Managing Director