Synlait is important to dairy in Canterbury and the company’s milk supply needs a critical mass, says Frano Staub.
By Frano Staub, general manager of Theland Purata Farm Group.
Synlait’s campaign to secure its future milk supply had a major win this week when Theland Purata Farm Group removed cease notices for six South Island dairy farms that supply Synlait, representing a total of 2.5 million kilograms of milksolids.
The decision for us to issue cease notices to Synlait had been our way of firing clear warning shots to the board and management.
We wanted to see Synlait lift business performance, improve financial returns to farmers relative to the market and improve the balance sheet – or we were off.
I am pleased to say that message got through.
Less than a year later, Synlait is tracking in the right direction. Its balance sheet is improved, it is forecasting a return to profitability this half year and now has one of China’s largest dairy companies, Bright Dairy, as its major shareholder.
There has also been change at both board and senior management levels, which shows intent.
All of that means Synlait’s future looks a lot brighter.
The incentives the company pays make a substantial difference to our revenue streams – as will the new secured milk premiums on offer for this and the following three seasons. Add to that Synlait’s new guarantee to match Fonterra’s advance rates and base milk price and farmers have a compelling proposition, especially given the company’s current turnaround.
We hope our farming colleagues take the time to think through their future carefully.
Synlait is important to dairy in Canterbury and the company’s milk supply needs a critical mass. The Dunsandel site is in an optimum location to serve the Canterbury region into the foreseeable future.
Synlait and Purata have long history of working together. The Purata farms were originally owned by the processor itself and have supplied the Dunsandel facility since its very first days of operation.
It is good to know that relationship will continue.
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