The dairy industry lifted its two year moratorium on new dairy farms in spring 2001. Since then 176 sheep and beef farms have been converted, with 19 in the North Island and 157 in the South Island, according to the Meat and Wool Economic Service of New Zealand. In addition, 198 smaller dairy farmers were amalgamated with neighbouring properties.
Avon and Carleen Gillespie from Mt Ella, Murchison are passionate about dairy farming, and have created a successful dairy conversion and improvement enterprise. Operating a number of separate companies which cross profits and losses between them, they are all overseen by the Gillespie Group Ltd, of which Avon and Carleen are managing directors and shareholders.
The Gillespie Group is primarily focused on the conversion of land to large scale dairying units, and the production of the finest quality milk. Born in Maruia and university educated, Avon has worked in retail, studied psychology for seven years, and last year did an MBA course at Auckland University to aid the development of their corporate structure. They have converted six large scale properties (most between 1,000-1,700 cows) and live on and sharemilk the largest, at Mt Ella with 2,100 cows.
"Next year we are looking at 10,000-11,000 cows, 52 staff, and employing 37 independent contractors. Yes, that is my business, a fair bit to keep under control," Avon said.
Most of the properties are clustered around Springs Junction, with some an amalgamation of properties, with another near Reefton and two smaller operations near Westport. He said the top end of Maruia had generally been considered too high altitude, and was sheep country before. "But it has worked well for Morecow Farm One - over 900kgs of milksolids to the hectare, considered well above the area average. We figure the area will be successful and that is why we will continue to convert the rest of those properties" he explained.
With most of the available land in the area now utilised they are looking to spread their wings farther afield to the Grey valley, and perhaps St Arnaud, depending on the availability of suitable properties.
Avon met and married Carleen in 1996, and he keenly pointed out that she is a vital and integral part of the business. They are both passionately driven in what they do in terms of business growth in dairying. Five years into a ten year plan they have been helped by the overall upturn in the industry. "In 1997 the market was reasonably low and attitudes not so positive towards dairy. The market is probably at its peak at the moment. We would be happy if it went flat, it makes it easier to buy cows and employ contractors etc. But on the positive side, the payout for what we produce is 30% above what we budgeted on, that helps us to accelerate capital growth."
The Gillespie Group presently has its milk production shared between Fonterra Co-operative Group and Westland Co-op Dairy Company Ltd. Avon said he supported the amalgamation of Kiwi and Tasman and the consequent improved performance of Kiwi, and then the amalgamation of Kiwi with Fonterra. He is happy with the current performance of Fonterra, and although was supportive of the merger with Westland, admits there are clear benefits from his point of view, for them remaining independent.
"We were quite happy for Westland to be standing alone because it is easier for us to grow our business in Westland, because the share prices are cheaper, whereas if they amalgamated with Fonterra, it could have probably added another $3.50 top share, which puts pressure on capital growth."
"There are plenty of challenges, the biggest being able to keep up with current business growth, and developing the corporate structure, employing a PA, office, accountants and staff. Setting up specific systems and a range of things to aid business, and provide more control. In the long term, this is where we would like to go, to have the opportunity to float on the share market, generate more capital and continue to grow."
According to Fonterra, the industry has 3.3 million cows on 13,861 dairy farms producing 1,047 million kgs of milk, with the South Island providing 23% of supply. The New Zealand statistical average dairy farm has a herd size of 236 cows, on 93 hectares, producing 750 kgs milk solids per hectare.
Gillespie admits fraud
The Nelson Mail | Wednesday, 19 September 2007
Disgraced dairy magnate adds to list of offending.
Former Maruia corporate dairy farmer Avon Gillespie, currently in prison for a range of crimes involving violence, drugs and weapons, has admitted fraud charges laid by the Serious Fraud Office.
Eight farming companies Gillespie co-directed went into receivership last year and in December 2005, collectively owing $25 million, after failing to meet debt repayments to the Bank of New Zealand, the major creditor.
In the Nelson District Court on Monday, a four-year prison term previously imposed on Gillespie, for causing grievous bodily harm with intent and possessing pseudoephedrine with intent to make the drug P, was extended by six months because of drug and shotgun crimes.
Gillespie, 45, reappeared in the Nelson District Court Tuesday and admitted six fraud charges.
One of the charges is the theft of $321,359 by dealing with property contrary to the requirements of the BNZ. Gillespie also faces five charges of using a document for pecuniary advantage.
A charge alleging that he used a letter as genuine when he knew it to be forged, was withdrawn.
Gillespie was a champion sharemilker who pioneered large-scale dairy farming around Murchison and Springs Junction between 1999 and 2004.
Defence lawyer John Sandston said in court on Tuesday there was "no hope" of Gillespie paying reparation, and the Crown would acknowledge this because of his poor financial situation.
Judge Tony Zohrab remanded Gillespie in custody to October 15 for sentencing on the fraud charges.
Gillespie's frauds top $2.1 million
The Nelson Mail | Friday, 21 September 2007
More than $2.1 million worth of fraud was committed by disgraced former Maruia corporate dairy farmer Avon Gillespie, the Serious Fraud Office says.
Gillespie, who is serving a 4½-year prison term for a range of crimes involving violence, drugs and weapons, admitted six charges laid by the SFO in the Nelson District Court this week.
Gillespie was, until recently, a prominent West Coast dairy farmer, operating a number of farms and other businesses in the Westport-Murchison area. The businesses were operated through various companies, partnerships and trusts, known collectively as the Gillespie Group.
Eight farming companies Gillespie co-directed went into receivership last year and in December 2005, after failing to meet debt repayments to the Bank of New Zealand, the major creditor.
In its prosecution summary, the SFO said the bank had assessed its overall loss from borrowing by the Gillespie Group at about $37.5 million.
The summary said the alleged frauds amounted to $2,176,313.
In relation to a charge of using a document with intent to defraud, the SFO's case was that Gillespie used a letter addressed to Roger Fensom of the BNZ to get a $930,000 restructured loan facility. The loan was to be secured over 1400 dairy cows.
However, the SFO alleged that the herd was fictitious, created by Gillespie to get finance and to allow his entities to continue trading.
It also alleged that in July 2004, Gillespie used a false contract for the lease of dairy cattle to show a business advisory group and the bank that the herd existed.
Among the charges Gillespie admitted was the theft of $321,359 by dealing with property contrary to the requirements of the BNZ.
The SFO's case was that Gillespie applied funds for his own personal expenses and to pay creditors not approved by the BNZ.
The office also alleged that Gillespie dishonestly used three false ASB Bank grazing partnership invoices to obtain a total of $165,694.38 for what purported to be grazing charges for the non-existent herd, and used a hand-written letter of instruction to the Westland Cooperative Dairy Company to divert payment of $625,259 from Westland for milk products to Gillespie's own account.
He also used a Hokitika Pumps and Filtration invoice for $135,000 to circumvent BNZ restrictions and obtain funds, the prosecution said.
Gillespie has been remanded in custody to October 15 for sentencing.
Gillespie's lawyer John Sandston said he had no instructions to talk with the media and was therefore unable to comment.
