Goodman Fielder

When Goodman Fielder was floated a little over three years ago it was promoted as a company that provided for investors in the same way as its products - bread, butter, milk and oil - provided for the nation. This was staple fare - a share for grannies.

The tagline on the prospectus for the $2.55 billion share float said it all: "Superior market positions supported by heritage brands - dividends and growth supported by a strong financial position."

Goodman Fielder projected growth in trading profits for the first two years of around 17%, a dividend yield of around 6-7% and imputation credits for New Zealand investors - a rare quality for a company that spanned the Tasman. And the company, in its first couple of years, delivered. Results and yields were robust. Sure, it was not exciting stuff, but it filled investors' tummies.

The last year has not been quite so bright. This is not because management has been doing an especially bad job. Instead it reflects the fact that recent economic conditions have thwarted Goodman Fielder at every turn. Goodman Fielder should be a defensive stock.

As a food manufacturer, it should be relatively insulated against the ebbs and flows of the economy. People might be able to put off buying a new car or a meal out, but they still need their (Meadowfresh) milk in the fridge and their (Molenberg) bread on the table. And when the economy roars away, the more highly-branded elements of its offerings such as luxury desserts or fresh cheeses might tempt shoppers.

However, few companies can withstand the volatility that has harried the market over the past year. This is especially the case for Goodman Fielder, whose fortunes are highly dependent on the trajectory of prices in the sector of the economy which has been subject to the most extreme swings in prices - bulk commodities.

In short, Goodman Fielder is proof positive that stability in prices is more important than the absolute level of those prices.

Prices for key ingredients, such as wheat for Goodman Fielder's baking operations and edible oils for its commercial and home ingredients businesses, soared to a peak around the middle of the year. The rise was linked to a belief that elevated oil prices would spur the planting of crops to produce bio-fuel, displacing food crops and thus elevating their prices.

Goodman Fielder's response to this surge was to lock in hedges at lower rates - believing commodities would be "stronger for longer." But as the turmoil in financial markets began to spill over into the real economy and commodity prices fell, Goodman found itself locked into hedges that prevented it from benefiting from the lower prices.

The firm last week warned commodity price hikes would lop $A100 million from its bottom line and it will not start to see the effects of lower prices until the second half of this financial year. The depth and the severity of the downturn have, ironically, unmasked a weakness in its strategy. Goodman Fielder's brands are supposed to be one of its greatest strengths.

Customer loyalty should allow it to pass on these costs. However, during this downturn, shoppers are leaving these in favour of the growing stable of supermarket house brands, depriving the business of one of the key levers to keep earnings on track.

One of the big questions now facing the company is whether the power of its brands in staple food categories has diminished.

As a result of these forces Goodman cut its earnings guidance saying it expected full-year net profits to be in the range of $A191 million and $A204 million, equating to a fall of 8% to 14% on last year's result.

However, it could be a lot worse. Management, led by former National Foods boss Peter Margin, has been working hard to contain these forces with cost cuts including 225 redundancies, rationalisation of its manufacturing sites and a refinement of its distribution channel.

At the same time it has been investing in new products initiatives. In New Zealand this initiative is represented by the development of a specialty cheese facility at its plant in Longburn in the Manawatu and upgrading the plant's yoghurt and liquid milk operation. In Christchurch it is developing a UHT milk facility from which Goodman Fielder will be able to service its emerging market opportunities, particularly in Asia.

Its balance sheet is also sound. As at June 2008 the firm has $384 million available in its banking facilities and net debt stands at around 65%, and interest cover at around 4.6 times.

Reflecting this strength, the firm has already refinanced well over half its long term borrowings at rates that represent a respectable spread over wholesale rates. It is also trying to increase its economies of scale with acquisitions including the River Mill Bakeries in Huntly, independent liquid milk producer Independent dairy producers, dip manufacturer Copperpot and the biscuit manufacturer Paradise Foods.
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Richard Inder is an investment advisor at Macquarie Private Wealth. His disclosure statement is free and is available on request. His clients may hold shares in the firms mentioned. Comments, think differently? Write to richard.inder@macquarie.com

New Zealand billionaire Graeme Hart has sold his shareholding in Goodman Fielder, the Australasian food giant he floated in 2005. The company said late last night that the near-20 per cent stake of New Zealand's richest man had fetched about A$562 million ($675.8 million).

Analysts said the sale would free up Hart to pursue acquisitions in the packaging sector, where he has been building assets, but was unlikely to put Goodman Fielder into play as a takeover target in the near future.

The sale of 265 million shares by Hart's Burns, Philp and Co through a subsidiary, BPC Finance (NZ), was made via a bookbuilding underwritten by Credit Suisse, Goodman Fielder said.  The company, whose brands include Mighty Soft, Meadow Fresh, ETA and Meadow Lea margarine, had its Australian shares placed on trading halt late on Thursday pending an announcement. Trading was also halted in New Zealand yesterday with a closing price of $2.70 a share.

CommSec analyst Grant Saligari noted that Goodman Fielder and other food and beverage firms faced tough conditions as Australia's worsening drought has pushed up wheat, dairy and oilseed prices. Goodman Fielder's shares last traded in Australia at A$2.23. They are little changed from the start of the year, but rose as high as A$2.80 in April. The broader market is up 18.5 per cent this year.

The Australian Financial Review said institutions had been asked to bid for Hart's stake at between A$2.12 a share and Thursday's close. Goodman's 2006/07 financial year net profit fell 38 per cent to A$239.8 million. It made a number of small acquisitions in the past year, including River Mill Bakeries in New Zealand.

Hart's sell-out of Goodman Fielder is the latest in a line of major deals by the one-time tow-truck driver. He bought and de-listed forest products giant Carter Holt Harvey last year for $3.3 billion and has since put its building supplies business up for sale, including 18 sawmill and manufacturing plants in NZ and Australia. The building supplies business sale is expected to fetch more than $2.3 billion. Macquarie Equities investment director Arthur Lim said the sale of assets did not necessarily mean Hart had another acquisition lined up.

However, he did have a track record of surprising the market. Hart has sold most of Carter Holt's forests for up to $2 billion, and the head office, various retail depots and packaging plants for more than $300 million. A successful sale of the timber products business would see Hart more than recover his outlay, with the strategic retention the firm's packaging division.

This year, Hart paid US$338 million for North Carolina-based Blue Ridge Paper Products and is merging it with Evergreen Packaging in Arkansas. Meanwhile, he has also completed a $3.2 billion acquisition of Swiss packaging group SIG.

Hart may be building a paper packaging empire but Lim would not be surprised to see him make an acquisition in another direction. "How about SkyCity? It wouldn't surprise me. It's a company that's been mismanaged. It's got core assets and it's got assets scattered about Australia and New Zealand that lends itself potentially to being sold." Hart's sell down would not trouble Goodman Fielder, Lim said. "Goodman Fielder has been its own company for quite a while now."

Selling out

• Graeme Hart has sold his Goodman Fielder holding.
• The sale of the 265 million shares was made via a bookbuilding underwritten by Credit Suisse.
• Hart is also selling Carter Holt Harvey's building supplies business for more than $2.3 billion.

An Indian businessman has paid a record price for an apartment, parting with $11 million for a new Auckland penthouse.  But high taxes mean he may spend little time there.

Mike Panjwani - who has business interestsin New Zealand, India, Singapore, Europe and Dubai - has bought levels 29 and 30 of the Sentinel apartment block in Takapuna.  Mr Panjwani has bought the apartment unconditionally, but will not be moving in until early next year because the property is a shell.

Speaking from Singapore yesterday, Mr Panjwani said he might only spend a few weeks a year in the penthouse.  "We don't know how much time we're spending there. My family can't afford to spend months in New Zealand. The taxes are very high."  Some Sentinel units have sold more than once, and units that fetched around $900,000 originally had resold for more than $1 million. 

The 117-unit tower will open in December.  The two penthouse levels are connected via an internal staircase. The unit was sold with a dedicated lift, four basement carparks, lap pool, spa and large glass-walled decks.

Barfoot & Thompson agent Wayne Muir, who acted for Mr Panjwani, said the businessman was impressed with the seaside suburb.  "He sees Takapuna as a premiere urban seaside location and was impressed by the quality and location of the Sentinel."

The penthouse is yet to be fitted out, but will have a combination of bespoke hand-crafted carpet and natural stone flooring.  Apartment walls will be able to be moved, and the apartment will include a home theatre, motorised windows, gas fireplaces, underfloor heating and large deck areas.  Mr Panjwani has owned a house in St Marys Bay, central Auckland, for a number of years. Two years ago, he sold a collection of large Auckland investment buildings worth more than $25 million through his company Empress Leisure to apartment specialist Blue Chip.

Caption: Street level of the 30-floor Sentinel apartment building in Takapuna, Auckland.

The sale means property developer David Henderson's Princes Wharf apartment is now the most expensive penthouse on the market.  That apartment, which went on the market earlier this year and was tipped to fetch $10 million, remains unsold. The apartment occupies the entire top level of the Princes Wharf block above the Hilton Hotel.

Businessman Colin Giltrap is understood to have set the previous apartment price record for a penthouse in Lighter Quay's North, on Auckland's waterfront.  Mr Giltrap previously lived for about 20 years in a Herne Bay waterfront home that he sold four years ago for $7.2 million.

MILLION-DOLLAR DREAMS

• Most expensive apartment for sale: $10 million Princes Wharf penthouse owned by property developer David Henderson.
• Most expensive house (not for sale): Graeme and Robyn Hart's sprawling $20 million Glendowie mansion.
• Most expensive property for sale: Pakatoa Island, Hauraki Gulf, $35 million, owned by businessman John Ramsey of Crusader Meats.
• Next most expensive: Cowes Bay estate on Waiheke Island, $30 million, 36ha with 1200sq m plantation-style mansion

In its first full year as a publicly listed company, Goodman Fielder has recorded another solid earnings performance with most businesses performing above expectations.

Net profit for the year was $243.2 million, an increase of $45.7 million or 23% on the previous year. The company's businesses generally performed well with revenue increasing by 2% from the prior year to $2,426.7 million. Earnings before interest, tax, depreciation and amortisation also grew, up by 7.5% to $444.1 million.

The result includes restructuring and integration costs of $13.0 million (post tax) and foreign exchange gains of $34.1 million (post tax). This delivers a normalised NPAT of $222.1 million.

FY2007; FY2006; Variation
Revenue: $2,426.7m;$2,379.0m;+2.0%
EBITDA: $444.1m;$413.1m;+7.5%
EBIT: $388.9m;$360.1m;+8.0%
NPAT(incl. OEI): $243.2m;$197.5m;+23.1%
EPS: 18.1c;14.7c;+23.1%
Dividend: 13.5c;5.5c (1/2 year)

The year was marked by particularly strong performances from the company's Fresh Baking and Commercial divisions, continuing the momentum established over the past two years. The company's Home Ingredients division performed well in Australia but overall was held back by a weaker first half performance in New Zealand.

A highlight of the year was the company's robust management of considerably increased commodity costs. Substantial increases in commodity prices increased the company's cost base significantly, however these increases were actively managed with margins being maintained following successful cost recovery in the marketplace.

Another highlight was the good progress made on the company's growth strategy with a number of value adding acquisitions and their successful integration into the existing business.

Businesses and brands acquired during the year included, in Australia, Country Life Bakery, Flinders Bread, Moores and Early Harvest Specialty Breads, and the Copperpot dips, yoghurt and pate business. In New Zealand, the company acquired Northern Bakeries, River Mill Bakeries and Canterbury Flour Mills during the year. Since year end Goodman Fielder has acquired the dairy business of the New Zealand company IDP Mainland Limited.

The company made significant progress during the year on its plan to increase manufacturing efficiency by consolidating its manufacturing assets across its portfolio. The company closed a number of older plants and is progressively restructuring its production platform to become the lowest cost manufacturer in the industry.

Our New Zealand dairy business made a slow start to the year following a disappointing performance in the previous financial year. As a result, the business was substantially restructured to create a more focused management structure under new leadership. These changes began to take effect in the second half and the business finished the year in a much improved position.

GF Fresh Baking

The GF Fresh Baking business experienced strong earnings improvement for the 2007 financial year, with the business returning EBITDA of $175.9 million, an increase of 22% on the prior year.

FY2007;FY2006;Variation
Sales: $960.9m;$919.7m;+4.5%
EBITDA: $175.9m;$144.7m;+21.6%
EBIT: $150.9m;$125.0m;+20.7%

The company's Fresh Baking division had an excellent year and returned a fourth successive year of double digit EBITDA growth. Although commodity costs rose to record levels during the year and the company incurred cost increases in fuel, packaging, oils and labour costs, all increases were recovered through a combination of price increases and internal cost reductions.

In Australia, the manufacturing function was reorganised under new leadership and the company is moving to a production platform focused on high volume, low complexity plants supported by a number of specialised plants to cater for more complex lower volume products. During the year a number of new products were launched into the market and several existing products were extended into new regions. A major private label contract had its duration and scope extended.

Market shares in loaf bread in the supermarket chains remained solid during the financial year and the company enjoyed steady growth in the supermarket sector. The trend to healthier eating alternatives continued during the year with the company's share of these higher margin categories increasing over the period in a growing market segment. This trend sustains the strong category value growth trend.

In New Zealand the GF Fresh Baking business had a relatively poor start to the year but experienced a better second half, finishing the year strongly. As in Australia, commodity and other costs rose steeply with business results being negatively affected, but price increases and cost reduction strategies were successfully implemented. Two non-essential manufacturing plants were closed.

Going forward the focus will be on new product development, with a renewed emphasis on innovation and launches of several new products planned. The focus on business efficiency and cost reduction will continue.

GF Home Ingredients

The GF Home Ingredients business performed well in Australia during the year, but was held back by its New Zealand performance. The business returned EBITDA of $91.1 million, up 3% on the prior year.

FY2007;FY2006;Variation
Sales: $367.6m;$342.5m;+7.3%
EBITDA: $91.1m;$88.7m;+2.7%
EBIT: $89.0m;$87.3m;+1.9%

In Australia the business has performed strongly during the year and increased its market share significantly as well as outperforming the market.

The company continues to leverage off the strength of its existing brands by extending their reach into new products. The business also concentrated on forging and maintaining strong retail partnerships.

In New Zealand, the business did not perform up to expectations in the first half of the year. However a reorganisation early in the second half resulted in an improved performance with the business ending the year strongly.

The Copperpot business was acquired during the year and has now been fully integrated. This acquisition will provide the business with a competence in shorter shelf life and chilled products which can be leveraged into other areas.

Going forward there will be a continuing emphasis on the ambient and frozen product segments to maintain market share growth in these categories. Incrementally to this, the company will pursue expansion in the supermarket chiller with spreadable butter, dips and expanded yoghurt offerings to complement the existing spreads business.

GF Commercial

The GF Commercial business continued to perform solidly during the year. EBITDA was $82.4 million, up 11% on the prior year.

FY2007; FY2006; Variation
Sales: $524.5m;$498.6m;+5.2%
EBITDA: $82.4m;$74.6m;+10.5%
EBIT: $69.2m;$58.4m;+18.5%

This result follows a similar solid performance in the prior year, maintaining the momentum established over the past three years despite increases in commodity costs.

Commodity prices over the period were at historically high levels with some reaching all time highs. Despite these cost pressures, the business was able to recover the increases in the market place through quarterly price reviews and through operational improvements, particularly in the supply chain.

In Australia and New Zealand the focus continues to be on developing and marketing healthy oils and a number of lower saturated fat and virtually trans-free products were developed during the year.

Exports into Asia increased strongly continuing the recent trend. However returns from the region were impacted by the strengthening Australian dollar.

Pacific

The Pacific business returned a solid EBITDA of $33.3 million for the year, an increase of 5% on the prior year.

FY2007;FY2006; Variation
Sales: $180.3m;$178.4m;+1.1%
EBITDA: $33.3m;$31.7m;+5.0%
EBIT: $29.3m;$27.4m;+6.9%

This result follows a similar performance in the prior year. The major developments during the year were the acquisition of La Biscuitiere, a leading baking business in New Caledonia, and the divestment of a non-core stockfeed business.

The Fiji business returned a solid result despite the impact of the military coup during the year, while in Papua New Guinea the company's flour milling operations performed strongly.

GF Fresh Dairy

The GF Fresh Dairy business in New Zealand delivered an EBITDA of $61.4 million for the year, a decrease of 25% on the prior year.

FY2007; FY2006; Variation
Sales: $393.4m;$439.8m;-10.6%
EBITDA: $61.4m;$82.2m;-25.3%
EBIT: $50.5m;$70.8m;-28.7%

The business did not perform to expectations in the first half of the financial year but, following an operational reorganisation midway through the year, it closed the year in a much improved position. The restructure resulted in greater accountability with the New Zealand dairy assets being split out as a stand alone division under new leadership.

During the year the fresh milk business experienced difficult conditions with considerable downward pressure on retail pricing. This followed a substantial reduction in retail pricing of supermarket house brand milk and a significant increase in raw milk pricing. Despite these pressures brand share remained stable.

Since year end, the company announced that it had entered into an agreement to acquire the business of IDP Mainland Limited (IDP), which will increase Goodman Fielder's presence in the route trade where IDP sells its Cow & Gate brand milk. The company has also been awarded a major milk supply contract with one of New Zealand's largest supermarket chains.

In the chilled dairy category, the company performed strongly and recorded a significant increase in market share following a successful relaunch of its yoghurt range and the success of Activate, a functional food probiotic yoghurt. Going forward the company will be pursuing growth in all of its key categories with a new yoghurt production line to be installed to meet market demand and considerable effort in new product development resulting in the launch of several new products and new packaging formats. The company will also be entering new segments leveraging off the strength of its leading brands.

Dividend

Directors announced a final dividend of 7.5 cents per share, bringing the full year dividend to 13.5 cents per share. The final dividend is payable on 31 October 2007. Books close on 28 September 2007.

Board appointments and elections

During the year the Board appointed two new independent non - executive Directors, Mr Gavin Walker and Mr Clive Hooke. Mr Walker has a background in investment banking at chief executive level and has extensive business experience in New Zealand. Mr Hooke is a former Chief Financial Officer of a publicly listed food company and has broad experience in the Australian corporate environment. Mr Walker and Mr Hooke will stand for election by shareholders at the company's Annual General Meeting.

Outlook

The company is performing solidly in the first quarter of the new financial year and is well positioned to deliver further profit improvement for the 2007/08 year (compared with the normalised 2006/07 result).

*****

The FY 2006 results presented in this statement have been prepared on a pro forma basis so as to include a full 12 month performance. The pro forma numbers have not been audited. They have also been re-segmented to align the divisional results with the FY 2007 organisation structure. Divisional results have been normalised to exclude the impact of significant and one-time items.

New Zealand's ranks of double billionaires have swollen, says a list of the country's richest people. Those with a personal fortune exceeding $2 billion include food and timber tycoon Graeme Hart, New Zealand's wealthiest man with $2.75 billion, according to the National Business Review's Rich List.

He is closely followed by the Todd family, a Wellington-based dynasty with a $2.6 billion fortune, and Eamon Cleary, an Irishman once described as New Zealand's richest farmer, whose property empire is now worth a cool $2.1 billion. Last year his wealth was estimated at $280 million but thanks to record high dairy prices and land values, his fortune has rocketed. Both with a $2 billion fortune are brothers Christopher and Richard Chandler. In December the brothers dissolved their 20-year partnership in their private investment firm, Sovereign Global Investment.

Also among the billionaires were the Goodman Family ($1.8 billion), and New Zealander-turned-Russian-magnate Stephen Jennings ($1 billion).

Rounding out the top 10 were the family of deceased alcohol baron Michael Erceg ($700 million), Douglas Myers ($700 million), and Sir Michael Fay and David Richwhite ($660 million each). The richest woman was Kathmandu founder Jan Cameron, with $300 million. Raising the minimum qualifying entry to $50 million from $25 million saw entrants fall to 176 from 222 last year. However, the overall wealth of Rich Listers grew 11 per cent to $39.07 billion.

NBR Rich List editor Andrea Parker said "$50 million is the new rich. That's the word according to this year's NBR Rich List. "For the past three years, the Rich List threshhold has sat at $25 million. It is time the bar was raised. "As Lloyd Jones writes in his article about attitudes to wealth: 'Today anyone who has title to property in the inner-city neighbourhoods of Wellington or Auckland or owns a shack on a piece of coastline is by proxy a millionaire. Millionaire is no longer a big deal'."

More interesting are the newcomers with property and real estate featuring along with technology and manufacturing. The self-made-man model is alive and well in the form of 38-year-old Manukau real estate magnate Don Ha, who comes in at 143rd equal overall with his financial worth estimated at $60 million. Not bad for a Vietnamese refugee who was just a kid when he arrived in New Zealand in 1980 with his penniless family. The family opened a string of bakeries in South Auckland but Mr Ha went his own way, importing shoes and belts from Asia, only beginning his real estate career in 1994.

Mr Ha became a top salesman in the Professionals Group, selling 86 properties in his first year. He was headhunted by the Ray White Group in 2004 and now owns Ray White Manukau, which has subsequently achieved record-breaking sales. Mr Ha shelled out $2 million on a Zabeel colt from champion racemare Sunline at the Karaka yearling sales in January.

Another to bask in the glory of self-made-man is Terry Serepisos, a Greek-born Wellingtonian who according to the magazine would be a Footballers' Wives dream with his flash cars, dress sense and ability to party hard. Worth $100 million and 88th equal overall, the property developer also backs the Wellington Phoenix soccer club, which he tells the NBR was an "investment from the heart".

Not only that, Serepisos sponsors the Wellington Cup carnival and the city's basketball team. Geoff Ross, who is worth $35 million according to NBR after selling his vodka company 42 Below to Bacardi for $139 million, tells the magazine that the biggest mistake people make when they're trying to start a business is undercapitalising. "They undercapitalise. They don't fully commit to it. They sort of half-commit. "That's my own criticism of myself - I wish I'd gone harder, faster, sooner and bigger."

Goodman Fielder has bought a small milk producer in New Zealand and scored top shelf space for its existing milk brand, plus a home brand supply agreement, in almost half of Kiwi supermarkets.

Australia's biggest listed food group announced yesterday that it had bought Independent Dairy Producers, for an undisclosed sum.  A Goodman Fielder spokesperson later confirmed the IDP buy was a "relatively small" transaction.  In March, Goodman Fielder announced the acquisition of Adelaide-based dip maker Copperpot, its first dairy buy in Australia, as part of a goal to develop a transtasman dairy business.  At the time, chief executive Peter Margin, who is a former head of Australian dairy producer National Foods, said Goodman Fielder was looking for acquisitions below the A$100 million ($110 million) mark.

IDP processes and supplies town milk under the Cow and Gate brand to dairies and small retailers in Auckland, Wellington, Tauranga and Hamilton.

Goodman Fielder already owns the Meadowfresh milk brand in New Zealand, and has just won a contract to supply about 30 million litres of house brand milk to supermarkets run by Progressive Enterprises.  Progressive is owned by Australia's Woolworths and runs the Foodtown, Woolworths and Countdown supermarket chains.

Goodman Fielder also announced that it had entered into a partnership with the Grate Kiwi Cheese Company, to supply cutting and wrapping for its cheeses.
- AAP

Graeme Hart is finishing off the year with a $3.5 billion play for packaging assets around the world.

His company Rank yesterday disclosed it was buying International Paper's drinks packaging division for $725 million and launching a takeover bid for listed Swiss packaging group SIG that values the firm's shares at $2.8 billion.

The bid puts Hart in the thick of a takeover battle. His offer trumps an earlier bid for SIG - by Norway's Elopak and private equity group CVC Capital Partners.

If he gets both assets they would link with the packaging business of Carter Holt Harvey - the former International Paper subsidiary he acquired at the start of this year for $3.3 billion - and will set the billionaire on his way to become a force in international packaging.

"Combined, the two businesses would have sales of $US2.75 billion ($4 billion), employ 7700 people and would offer a range of beverage and food packaging solutions from a global network capable of servicing regional and multinational customers," Rank said last night.  Carter Holt's packaging business has sales of about $600 million.

Before the announcement, SIG's shares in Switzerland were trading at 358 Swiss francs ($423.8), below Hart's bid of 370 franc but above the Elopak offer of 325 francs.

SIG manufactures cartons for food and drink products, as well as machinery and in 2005 it had sales of $2.7 billion. It employs more than 4700 people and is divided into two divisions - Combibloc and Beverages.

Rank said the acquisition of International Paper's beverage packaging arm was expected to close on January 31, subject to the receipt of regulatory approvals and other conditions.

It specialises in producing liquid paperboard packaging for fresh milk, dairy and juice. It includes a 700,000-tonne pulp and paper mill at Pine Bluff in Arkansas - similar in size to the Carter Holt Harvey Kinleith mill - as well as other facilities scattered across the US, Canada and Asia.  The business employs about 3000 people and produces more than 670,000 tonnes annually of packaging. The business had net sales of about $US859 million in 2005.

The deal caps off an epic year for the billionaire, that started with the privatisation of Carter Holt.

This month he completed the break-up of Burns Philp - the Australian food company which he bought into in 1997 - when he sold his Bluebird snack business to US food and drinks giant Pepsico for $245 million.  In May, Burns Philp's Uncle Toby brand was sold to Nestle for about $1.1 billion. That and the float of the Goodman Fielder business last year gave Burns Philp $2.9 billion, net of debt. Hart privatised Burns in November for $1.5 billion.

At the time analysts said he had enough equity to raise money for acquisitions worth more than $12 billion. That was not counting the unknown level of equity he has in Carter Holt Harvey.  He has since sold most of the group's forests to American firm Hancock for about $1.5 billion.

Hart is also understood to have looked at Australian packaging company Amcor. Market commentators say the frenzy of private equity in Australia has pushed prices higher than Hart is interested in paying.

BIG MONEY
* March: after paying more than $3.3 billion, Hart gains full control of Carter Holt Harvey.
* May: Burns Philp sells Uncle Toby's business to Nestle for $1.1 billion.
* August: Hart makes full takeover bid for Burns Philp.
* October: CHH buys nine ITM hardware stores. CHH sells forest assets for $1.5 billion.
* November: Hart gains full control of Burns Philp.
* December 7: Sells Bluebird for $245 million.
* December 19: Agrees to buy International Paper's drinks packaging business for $725 million and launches bid for Switzerland's SIG.

Australasian food company Goodman Fielder was today cleared to buy River Mill Bakeries by competition watchdog, the Commerce Commission.

Commission chair Paula Rebstock said that the commission was satisfied the proposed acquisition would not substantially lessen competition.

Goodman's brands include: Vogel's, Quality Bakers, Country Split, Freya's, Molenburg, Sunny Crust, MacKenzie, Nature's Fresh and Golden Bake.  Its flour mills are situated in Mount Maunganui and Christchurch.

River Mill Bakeries is an independent, privately owned bread and ingredients manufacturer based in Huntly, in the Waikato.  It makes bread, small goods, pizza bases, frozen goods and cookies as well as importing and distributing a variety of food products.  Its bread brands are River Mill, Sun Raised and Millstone, and it produces house brands for Mad Butcher and Export Meats.

River Mill Bakeries also owns Canterbury Flour Mills in Ashburton.

Goodman Fielder was spun off by Graeme Hart's Burns Philp in 2005 in a $2.1 billion float.

The Commerce Commission has received an application from Goodman Fielder Limited (Goodman Fielder) seeking clearance to acquire the flour and bread assets of River Mill Bakeries Limited (River Mill Bakeries).

Goodman Fielder is listed on both the Australian and New Zealand stock exchanges and is involved in the manufacture and supply of a wide range of ingredients and food products. The operations relevant to the application for clearance are its New Zealand bakery and flour mill operations. Goodman Fielder's bread brands include: Vogel's, Quality Bakers, Country Split, Freyas, Molenburg, Sunny Crust, MacKenzie, Nature's Fresh and Golden Bake. Its flour mills are situated in Mount Maunganui and Christchurch.

River Mill Bakeries is an independent, privately-owned bread and ingredients manufacturer based in Huntly. It manufactures bread, small goods, pizza bases, frozen goods and cookies as well as importing and distributing a variety of food products. River Mill's bread brands are River Mill, Sun Raised and Millstone, and it produces house brands for Mad Butcher and Export Meats. River Mill Bakeries also owns Canterbury Flour Mills Limited in Ashburton.

In considering the application, the Commission's role is to determine whether the acquisition has the effect of substantially lessening competition in a market.

A public version of the application will shortly be available on the Commission's website http://www.comcom.govt.nzunder Public Registers.

Australasian food giant Goodman Fielder is restructuring its New Zealand division, a move which has prompted the resignation of local managing director Alison Taylor.

The listed company's dairy and baking businesses in New Zealand will now operate as individual business units rather than as part of a larger GF Fresh New Zealand division.

Taylor will leave next month.  There were no plans for downsizing, job cuts or other changes, a Goodman Fielder spokesman said.

"I'm sure there'll be gains but savings isn't the issue, it's a matter of providing focus to the business."  Taylor had the option of staying, he said.  "But she's chosen to go, which is fair enough because her job's a bit smaller now than what it was."

The purpose of the restructuring was to improve the performance of both businesses "particularly the dairy business, and to that end, they've appointed a specialist in that area", the spokesman said.

David Glik - currently group executive, marketing and innovation at National Foods - will become managing director of Goodman Fielder's New Zealand Fresh Dairy division.  Phil Hand has been appointed managing director of the Fresh Baking New Zealand division and will report to GF Fresh Baking managing director Gordon Hardie.

In November the company said it expected to meet its forecast earnings and dividend for the year despite expecting difficult trading conditions in the last part of the year.

Last week Goodman Fielder confirmed it would pay the full acquisition price of $869.59 million for New Zealand Dairy Foods Holdings, which had achieved revenue targets since the deal was announced.

The company's share price closed unchanged at $2.58 yesterday. It has risen 9c since the start of the year.

Goodman Fielder was delisted in 2003 when Graeme Hart vehicle Burns Philp executed a A$2.25 billion ($2.54 billion) takeover.  The business, plus dairy assets belonging to Hart's Rank company, was relisted in December, 2005 ,by Burns Philp with a value of A$2.65 billion and raising A$2.12 billion.

Hart bought into Burns Philp in 1997 and in November was successful in his bid to take full control of the company - gaining access to its $2.9 billion in cash, Blue Bird Foods and a 20 per cent stake in Goodman Fielder.

GOODMAN FIELDER
* More than 6000 employees across Australia and New Zealand.
* Brands include Vogel's, Freya's, Meadow Fresh, Tararua and Kiwi Bacon.
* Products delivered to more than 29,000 outlets every day.
* Graeme Hart still owns a 20 per cent stake.