July 28, 2015
Business profitability and success is not just based on favourable seasons and commodity prices – it’s about strategically focusing on the core business and identifying the key opportunities to boost returns, says North Queensland canegrower Chris Lyne.
Recognised for his vision, analytical focus, and business leadership skills, Mr Lyne has been awarded the Dr John Morris Business Development Prize after graduating from Rabobank’s prestigious Executive Development Program this week.
Mr Lyne said that before undertaking the Executive Development Program, he held the view that the only way to increase farm profitability was to attract good prices for his sugarcane, hence success always hinged on the “mercy of the market”.
“We undertook some significant benchmarking activities while on the first module of the Executive Development Program and I had a ‘light bulb moment’ where I realised that the most important thing was to identify what it is in your business that gives you the best returns – and, work out what is holding you back,” Mr Lyne said.
“I came home and began developing a model that worked on improving year-on-year and looking at our business analytically. We basically threw out the dogs and began fattening the ‘cash cows’.”
The results have been financially rewarding – with the farm producing its best yields to date.
The Executive Development Program is Rabobank’s flagship training program for rural entrepreneurs across Australia and New Zealand. Now in its nineteenth year, the course is delivered across two modules, and aims improve the business management skills of leading farmers seeking to take their enterprise to the next level.
Mr Lyne received a $5,000 cash prize presented by Rabobank Australia & New Zealand chief executive officer Thos Gieskes at the Executive Development Program graduation dinner held at Public Dining Room, Balmoral Beach, Sydney.
Mr Lyne is the manager of the Ayr Farming Partnership in the Burdekin region of Northern Queensland where he has been for seven years with his wife Kate, and daughters Millie and Emily. The total farm area is comprised of 420 hectares of fully irrigated farmland with a core focus on sugarcane production.
Mr Lyne said after the first week of the program it was clear he had to study the numbers of the business and come to terms with the story they told.
“I looked closely at our sugarcane operation – our core business – and looked and where we had to be to be profitable,’” he said.
“We dug into our own numbers and also consulted with other farmers and industry experts to determine what the top sugarcane growers were getting yield-wise. We set a difficult but achievable target and involved all our employees, consultants and directors to get them on-board with the target.”
Mr Lyne said he had also examined other functions of the farm business that were not extremely profitable, yet were impacting on the core business of growing sugarcane.
“Our core enterprises are early-plant sugarcane, late-plant sugarcane and ratoon sugarcane, but the side businesses included mung beans, soybeans and rice, which despite having some income they weren’t particularly supportive of our core operations and were having mixed results,” he said.
“We decided, based on the numbers and the benchmarking, that the late-plant cane wasn’t working for us and these subsidiary fallow crops needed to be removed because they were hindering our progress, adding risk to the business and costing us time and money for little financial gain.
“However, we found that the soybeans were actually providing handy income and not taking away from our core focus, so we have stuck with them.”
Taking a step outside his business and delving into the financial details allowed Mr Lyne to set up long-term strategies for business success, as well as measurable targets to maintain growth and profitability.
“If it wasn’t for the Executive Development Program, we would still be running the business like we were before, remaining at the mercy of the market and not maximising returns in key areas that we can control,” he said.
“We’ve removed the roadblocks as best as we can and we’ve got a clear plan and strategy steering us towards running a better business.
Rabobank Australia & New Zealand is a part of the international Rabobank Group, the world's leading specialist in food and agribusiness banking. Rabobank has more than 115 years' experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 41 countries, servicing the needs of approximately 10 million clients worldwide through a network of more than 1600 offices and branches. Rabobank Australia & New Zealand is one of Australasia's leading rural lenders and a significant provider of business and corporate banking and financial services to the region's food and agribusiness sector. The bank has 94 branches throughout Australia and New Zealand.
Rabobank Australia & New Zealand
Phone: 02 8115 2744 or 0439 603 525
Rabobank Australia & New Zealand
Phone: 07 3115 1832 or 0418 216 103