David Mair: Sanford Managing Director on the company's half-year profit more than doubling

Half-year profit has more than doubled for New Zealand seafood company Sanford. 

It's the best result in a decade for the company, which took home $34 million in profit in the six months to March this year. 

It's seen improved salmon sales, especially in the US and China. 

Managing Director David Mair told Mike Hosking he's been there for just over a year and has been working to increase productivity. 

He says he's reviewing every process within the business and says it's important that if a company tries to add value, it doesn't exceed the added cost. 

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Episode Transcript

Speaker 1 (00:00):
Well in a week, we spent quite a bit of
time in the old smoke Salmond issue. Are having discovered
you're paying well and excess of one hundred dollars a kilo.
Sandford come to the party, as you heard before, having
more than doubled their half year profits. They're making big
gains sales wise and places like China and the States,
which is good. David Mayor, Sandford's managing director, and is
with us. David morning, Good morning, Mike. How are you
very well? And as Andrew alluded to a couple of

(00:20):
moments ago, you knew wish to the company, are you
enjoying it? And is it a good company?

Speaker 2 (00:26):
I'm enjoying it. I've been there just over twelve months,
and yes I am enjoying it. And is it a
good company? It will become a great company soon.

Speaker 1 (00:36):
Okay, what are you doing?

Speaker 2 (00:38):
What am I doing? I'm reviewer. I'm reviewing almost every
process within the business. So I think it's fair that,
like a lot of New Zealand companies, centered went down
a path of trying to add value. And that's interesting,
but you have to be very clear that you're adding
more value than you're adding cost. So for many many years,

(00:59):
more than probably nine years, I think, and many companies
have done this, particularly in the meat industry and things
like that. We're told we have to add value. It's
near it it's I think centered's products. They're great products,
like you mentioned salmon. Our products are fantastic when you
see them. But the reality is it's near commodity where
price takers people don't like to hear. That is, if

(01:20):
there's something wrong with a commodity business run well, they
can be very profitable, they can be very good for employees,
they can be very good for shareholders.

Speaker 1 (01:28):
How competitive is the market, Well.

Speaker 2 (01:32):
If you're a price, the market decides your price, and
price drucks straight through the EBIT. So price is incredibly important.
So often as I go through these processes with teams,
I remind them that really there's no such thing as revenue.
This price times the volume for each for each item
that you sell. So it's really important to understand. You know,
if there's a five percent change up or down in price,

(01:54):
it drops through as soon as the invoices go out.
Five a plus one is five percent on volume. You
don't know it depends on your cost structure. Most companies
do not have a Sorry, most companies do not have
a plan to improve productivity. We argue about what we
should be paying. We've got this living wage stuff and
everything going on. If you pay people more money, but

(02:16):
there's no productivity, there's a natural into that.

Speaker 1 (02:20):
Correct, right? Is there a story to be told around
one New Zealand as the producer of this product and
two the health bit to fish.

Speaker 2 (02:32):
I think there is so again, you know, I'm sure
you know. I worked at scalar Up for a number
of years, since twenty eleven. I was managing directive there.
So my sort of view is New Zealand's tiny in
the scheme of things, and there's one thing they want
from us, and it's high quality protein. And so when
I was at scalar Up, I thought a lot about milk.
I was on the board of a two milk from
two thousand and eight to two O one five. To me,

(02:55):
that's something we just need to get our head around.
It's not about branding our fish necessarily. I mean, the
King salmon is fantastic product, but it's competed the volumes
of Atlantic sem it's almost nothing. You're talking about health benefits.
I think there are health benefits. But you can't rush
and spend a lot of money and suddenly think you're
going to sell the benefits of health products into China.

(03:17):
It's just thought wherever. It's just very, very difficult, and
you know, a game with health products, you've got to
be careful about claims. So you know, the A two
experience was good, good learning there. But I think one
thing I should say is I when I took on
this role, I agreed with Sirob that year and one
other director that this is at least a two year turnaround.

(03:40):
So the results are pleasing, and I hope our team
feel proud of what they've achieved. But at the same time,
this is just the start. That's what I meant.

Speaker 1 (03:48):
That soon good Well. I wish you based with it,
and we'll talk more about it as the turnaround continues.
Appreciate your time. Congratulations David Meham, who's the same Ford
Managing Director.

Speaker 2 (03:58):
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