GENTECH SEEDS – A Family owned BUSINESS
In May 2016 DuPont Pioneer announced an agreement for Philip Yates Family Holdings Limited (PYFH) to acquire its Pioneer Australia Seeds (PAS) entity. This acquisition included the production, sales, marketing and distribution of Pioneer® brand hybrid corn, sorghum, summer forage and canola seeds, and silage inoculant products in Australia.
A newly formed business of PYFH, GenTech Seeds Pty Ltd is now the exclusive producer and distributor of Pioneer® products in Australia. DuPont Pioneer has maintained its research facilities and assets in Toowoomba, QLD and Wagga Wagga, NSW under its Pioneer Hi-Bred Australia subsidiary which continues to provide research and new products to GenTech Seeds.
The Team at GenTech Seeds is pleased and proud to be part of the Philip Yates Family business. Philip and his son William (Will) come from a family with a long multi-generational involvement in the seed industry. They are excited to be working with the GenTech Seeds Team in Australia and importantly look forward to meeting the future needs of Australian farmers and helping grow the Australian agricultural industry.
Philip recounts below the family’s background and history in the seed business.
A Yates Family history
I have been asked to outline my family's endeavours over more than two centuries in the seed business. I do this with some humility and reticence but also some pride.
The story begins at about the same time as Captain James Cook was first exploring the New Zealand coastline and Wolfgang Mozart was at the peak of his creative genius. It was also the time of the French revolution and the American war of independence.
James Yates (1765-1819) was an eager young man who noticed the demand for improved cloth and clothing as the wealth of England increased rapidly in the early years of the industrial revolution.
James became an importer and as his first venture resolved to seek better materials for the emerging fabric mills of Lancashire. He found supplies of cotton were available from the colonists in the southern part of present day USA. He became a cotton importer.
Soon the mills were demanding ever higher quality cotton. This, James Yates could not supply. Acting on hearsay, he imported a small supply of cotton seed from Egypt to forward to the colonial growers. This quickly proved to be an inspired move and the demand for James Yates' high quality cotton seed grew rapidly. Shortly after, James relinquished the cotton importing business and became a seed merchant. A family vocation was born which continues to this day.
THE FAMILY BUSINESS BEGINNING
As a 22 year old in 1826, George Yates (1804-1897) the younger son of James, opened a seed store in Macclesfield near Manchester, England. Three years later he opened a second store. In 1846 his eldest son Samuel Yates (1831-1907) aged only 15 was put in charge of the branch! Within just a few years, Samuel's branch business had outstripped that of his father. He became a business partner of his father in 1855. Samuel subsequently purchased his father's share of the business from the rest of the family. Samuel married the daughter of William McMullin who was a partner in Hurst and Sons, the largest and longest established English seed house. Thus the family lineage then contained a seed firm background on both the maternal and paternal sides. Other sons of George Yates established seed businesses in other parts of England and Canada. Some of those firms are still trading today.
Over the years that followed, Samuel's five sons joined the family seed firm. The second son Arthur (1861-1926) was a somewhat sickly asthmatic. A family conference following medical advice, resolved that Arthur should travel to a warmer climate. The smoky cold air of the industrialising British Midlands was the worst of all places for Arthur to be. An examination of the world atlas revealed large areas of the world coloured red on the map to denote the then huge British Empire. Of the "all red routes", New Zealand was furthest away and thus offered the prospect of the longest sea voyage for Arthur's convalescence. The voyage out was long and slow. Departing from Liverpool, it took two weeks just to beat around the northern coast of Ireland against contrary winds and tides. During the long voyage, there were three births and two burials at sea.
ARRIVAL IN NEW ZEALAND AND OPENING UP SHOP
Upon landing in the colony of New Zealand in Otago, the 18 year old Arthur worked at shepherding and eventually settled in Hawke's Bay as a shepherd. In his spare time, he scythed grass seed from the sides of the road and sent it on coastal ships to the Auckland market. Very shortly, the seed revenue was far outstripping his shepherd's wages. Arthur followed his instincts and moved to Auckland in 1882 where he rented a small rickety wooden shop in Victoria Street West and opened as a specialist seed business. The chief problem appeared to be the butcher's shop next door.
The flies were driving away his customers. A firm letter to the Town Council soon had the problem fixed! Takings on the first day were one shilling and sixpence and the expenses two shillings and sixpence. This obviously was not a winning combination for a new business. However, six days later, Arthur placed the whole of the first day's takings in the church collection plate on the following Sunday! Sales trips lasting some weeks on horseback through the farming districts of New Zealand followed with much success. He hired horses, each horse change being one days ride apart. The business prospered.
In 1886 after leaving school two years earlier, Arthur's younger brother Ernest Yates (1866-1947) followed from England and joined Arthur in partnership in 1887. Ernest was my grandfather and William Yates' great grandfather. Arthur's health remained somewhat poor and it was later decided by the two brothers that Arthur should settle in Sydney with its even warmer climate. The firms on both sides of the Tasman Sea flourished and were run as a partnership until 1906. It was at that time agreed with both brothers having growing families that the businesses should be run and owned as two distinct and separate firms, but with the same name of Arthur Yates & Co. Ltd. and in the same line of business.
Sometime earlier after settling in New Zealand, the brothers had decided it was time for them both to find brides and raise families. There was an acute shortage of suitable young ladies in the colony. They wrote to their parents in Manchester (letters took up to five months to arrive by sailing ship) and said that their desire was to get married. Could their parents have a look at who might be suitable and perhaps have seemly and suitable candidates appraised and await their arrival back in England. To the brothers' surprise and delight, upon stepping ashore on arrival in Liverpool, Arthur and Ernest were confronted on the wharf with 20 lovely young ladies who wanted to be introduced.
Some sorting out soon took place and within a few weeks, wedding bells were ready to ring. Arthur married and sailed for Auckland. My grandfather Ernest Yates was not so lucky. His chosen one, Miss Mary Wright got nervous about the huge step she was about to take into the unknown world and could not make the decision to sail with Ernest for the uncertain life in New Zealand. Disconsolate, he sailed alone for Auckland via the just opened Suez Canal. A stop off in Gibraltar was opportune. Awaiting him was a message via the newly installed telegraph system. "Please return to Manchester. I do want to marry you!" Leaving the ship, a hurried and arduous horse and coach journey through Spain, France and England reunited the couple together. Thus were my grandparents married.
ERNEST, NORMAN AND PHILIP YATES
I am very proud of my grandfather Ernest Yates. He was a quiet, humble, widely read and gentlemanly man. As a young boy, my fondest and clearest memory is of sitting on his knee for hours and asking, "tell me about the world Grandpa". He was much loved by me and the other grandchildren. He was also a man of great vision and acumen. Amongst his many and varied ventures was the early introduction and sale of safe, bottled and pasteurised milk for city dwellers. Another "first" was the novel importation of seed and the planting of Pinus Radiata on a large scale. A much acclaimed venture was on the Manukau Harbour, where he built a stop bank with horse teams and reclaimed 220 acres of sea, under which was highly fertile marine silt for farming. That reclamation continues today, being farmed very successfully with high yields of maize for grain, two and a half metres below sea level. Most particularly though, Ernest Yates built a great seed business. He adhered to the principles of integrity, consideration for others in a commercial sense and highest quality with value to the customer. Although it grew to be a large public company, the firm continued to embody the best of the traditional "family" business culture handed on by previous generations.
Norman Yates (1907-1989), the youngest and fourth son of Ernest Yates, was my father. Norman was universally liked and respected by all. He also was a humble and quiet, gentlemanly leader. He was held in something approaching awe and affection by the many staff. To Norman, the Company's staff were an extension of his own family. In the 1920s Norman Yates had responsibility for the Coromandel Peninsula sales territory. He fulfilled this task on horseback, being absent from home for weeks at a time. He stayed for the nights at the homesteads of warmly hospitable farmer customers. This option for his lodgings was the only possibility in that sparsely settled region in those pioneering days. My father became Managing Director of Arthur Yates & Co. Ltd. in 1949 and later Chairman in 1962. Norman Yates took the family seed firm "public" in 1969 when it was listed on the New Zealand stock exchange.
I was born in 1932 and joined the family seed business as an awkward and shy 17 year old junior in 1949. In January 1973 I became Chief Executive and Managing Director. The Company grew over the next decade from sales of $6 million to sales of $275 million and staff numbers increased from 250 to approximately 2,000. All the while, the emphasis continued to be placed on integrity, quality, value and emerging technologies which could benefit the customer. From my earliest memory, I was taught these family commercial ideals by my father.
Notable was that in the 1970s, the Yates Company broke the longstanding Government monopoly in plant breeding and was the first in private industry to develop and market a proprietary agricultural seed cultivar. Thus was started a trend which has hugely benefited New Zealand agriculture ever since.
REPRESENTING PIONEER HI-BRED INTERNATIONAL, INC.
In 1975, I had arranged for Arthur Yates & Co. Ltd. to represent the worlds largest and finest maize seed company Pioneer Hi-Bred International, Inc. of America as a producer and distributor for Pioneer in the territory of New Zealand. Pioneer had assembled over the previous 50 odd years the largest library of plant germplasm in the world. They were the leading innovators in plant breeding and related technologies. From my own researches, I had concluded that a decision to negotiate with Pioneer for New Zealand was by far the most attractive option. Subsequent history has proven this to have been the right choice. At Pioneer I found a stock exchange listed family company, which held the same vision and conservative family values as those nurtured by the Yates family and practiced by the Company. I had a strong feeling of kinship with the folk from Pioneer. They were like us.
However the stringent quarantine regime on maize seed that existed at that time in New Zealand meant that only about four dozen single seeds were permitted to be imported to start in the hybrid maize seed business here. Half of these seeds were destroyed in the quarantine process. It took until the early 1980s for seed volumes to be modestly multiplied, testing to be carried out and sales to start in a small way. The Pioneer brand was rising on its undoubted merits in New Zealand, but was only a fledgling in 1985.
To provide new technology and additional capital, but also as a takeover defense, I had earlier invited Pioneer to be a cornerstone shareholder of Yates in 1979. This the Pioneer Board agreed to and a 20% shareholding stake was taken. Pioneer's President and later Chairman, Tom Urban joined the Yates Board of Directors. The managements of both companies worked closely together at a number of levels and benefits were gained for both organisations. However it would be fair to say that most of the ideas and technology flowed from Pioneer to Yates at that time rather than the other way around.
Founded only in 1928, Pioneer was a very large company by New Zealand standards. It had become by far the most successful seed company in the world. Henry Wallace who founded Pioneer, was later to become Vice President of the United States of America in the Roosevelt Administration during World War 2. He was the early developer of hybrid maize, liberal in his ideals and a widely respected humanitarian. A truly great man.
THE CHANGE: YATES CORPORATION AND EQUITICORP
The Overseas Investment regulations in 1979 made it unlikely that any shareholding stake larger than 20% would be agreed to by the New Zealand Government. At the end of the day when the share market raids on the Yates Company came, an overseas-owned entity was prevented from exercising any realistic and timely defensive activity by these same regulations.
The crazy commercial attitudes and wildcat financial schemes of the early and mid-1980s, had brought unwelcome, but for a while successfully defended share market forays on the Yates Company's share register. Finally however in July 1985, Equiticorp, a very recently established investment bank, gained control. I could not agree to their short term opportunistic business philosophies and the proposals to purloin the Company's substantial cash resources for their other ventures.
At age 53 I was dismissed by Equiticorp and given two days to vacate the office. I was shortly followed by dozens of other long term Company employees who had their careers terminated. They had been the backbone of a great New Zealand enterprise. I had been with the company 36 years. A couple of years later and after a history of 102 years of continuously profitable trading even in the 1930s depression years, Yates was in receivership along with all the rest of Equiticorp. A short while later, the whole of Equiticorp disappeared in the largest business collapse in New Zealand's history.
As that great man of letters Dr. Samuel Johnston in seventeenth century London wrote, nothing so concentrates the mind as the hangman's noose! My mind was necessarily and singularly focused at that time. I needed a new job and an income.
FORMING GENETIC TECHNOLOGIES LIMITED
It was a sobering experience being unemployed in middle age. I was 53 years old. It was also quite hard to maintain my own personal morale and self-esteem. With the large number of family members as shareholders plus the approximately 9,000 public shareholders, my own Yates shareholding was quite minimal and released little capital to start any new venture. The very high marginal income tax rates for salary earners that had existed through most of my working life (it was 66% in 1985) and the egalitarian ethos in New Zealand, meant that building any significant capital base was always a struggle with savings from a salary.
After careful consideration of all the options and recognising that employment opportunities were very limited for a middle aged 53 year old former manager, I came to the conclusion that starting my own business was the only realistic outcome. The decision to start a new seed company was a natural follow on. Genetic Technologies Limited was formed for the specific purpose of building the Pioneer seed brand in New Zealand and promoting maize. I had been offered the Pioneer representation after the Equiticorp debacle.
I mortgaged my house and gave the bank a guarantee over all personal assets. To further help with the funding of the new business, my by then adult children agreed to the small nest egg from their late mother's will being lent to the new company.
The first priority was to install first class budgeting and financial reporting computer systems. This decision was the key to the wonderful support the new company, Genetic Technologies Limited has received from Westpac bank during the past 31 years to the present day. The bank's support at the critical start up time made the new venture possible. The experiences I had received in managing a large and complex corporate organisation were also proving invaluable. However it was the talented and wonderfully motivated team of quality people that I was fortunate to have join me that was the key to success of the new company. They all became my friends in the crusade that was to follow.
MAIZE SEED PRODUCTION IN NEW ZEALAND AND THE EARLY INDUSTRY
As an undercapitalised new business, early troubled and abortive efforts with imported hybrid maize seed soon proved the commercial non-viability of this seed importing business model. The decision was made to build a 'state of the art' specialist maize seed production plant in Gisborne for producing highest quality New Zealand grown seed. In this venture of faith, I was hugely supported in so many ways by Pioneer all the way through. New technologies were also becoming available just in time to help make the new venture viable and more secure.
These were the personal computer, the fax machine and mobile phones. Without these modern tools, it would have taken years longer to securely establish the new business. In many ways it just might not have been possible at all! The recently available computerised spreadsheet planning software, was probably the biggest single development to give me the confidence to take the necessary business risks. The fax gave the fast communications with Pioneer that were crucial and the mobile phone hugely increased the early productivity of the small outside staff team who laboured so long and hard to spread the Pioneer and maize messages.
An early key decision was to accept the challenge to promote maize silage and novel maize grain uses for the livestock and in particular the dairy industry. For this innovation new skills were needed. A Ruminant Nutritionist was an early staff appointment and Dairy Industry Forage and Farm System Specialists were subsequently recruited to specialise in preserved forages and associated technologies. An ambitious research program was an early initiative. Thousands of crop weighings and a much larger number of well-planned and accurate farmer trials were the key to making the correct product introductions.
Grain and maize silage yields and consistency have steadily increased over the years as a result. More recently, powerful and sophisticated computer analysis methods have made possible more finely focused product recommendations for growers. It has been possible to introduce 'statistical robustness' or 'significance' into the results of the products we promote to farmers. This is a major step forward and further reduces the chances of planting the wrong product. Cropping reliability has been enhanced accordingly. Maize as a crop has become a safer option compared to alternative land uses. This reliability has in turn enhanced the standing of maize as a routine crop of choice over much of New Zealand.
MAIZE AND GENETIC TECHNOLOGIES LIMITED TODAY
Maize was a relatively minor crop in New Zealand 24 years ago. Today it has assumed a new importance. The Genetic Technologies Limited Team has risen to this challenge. We have poured their talents and the Company's limited resources into over two decades of maize acreage building. Entirely new opportunities have thus been created for the country's maize growers, dairymen, other livestock producers and the whole maize industry infrastructure. This broadly based effort is ongoing.
Founded in 1986, Genetic Technologies Limited in New Zealand and as from June 2016, GenTech Seeds Pty Ltd in Australia comprise our family business, the sole focus of which is to represent the Pioneer brand in this part of the world. My only son William Yates (born 1965) is involved with both businesses and holds to all the traditional family business values which have been preserved over the last 230 years of the family’s involvement in the seed industry. I am comfortable in the knowledge that as before, these time tested values will continue into the future.