New Zealand-based dairy processor Synlait Milk has finalised a strategic review of its North Island assets, including its manufacturing facility in Pōkeno and blending and canning operations in Auckland.
This review is a key component of the company’s broader recovery plan, aimed at enhancing financial performance and operational efficiency.
The review evaluated various factors, including potential ownership structures and the feasibility of mothballing the Pōkeno facility. A significant finding indicated that the plant’s dual processing of dairy and plant-based proteins has adversely affected operational efficiency.
Consequently, Synlait’s Board has decided to refocus the Pōkeno operations exclusively on producing advanced nutrition products that do not require raw milk.
CEO Grant Watson said: “The review has been detailed and thorough. It’s given us the insight needed to lift the financial performance of these world-class assets. We now have a pathway to ensure our North Island operations will be profitable in the future.”
The decision to scale back Pōkeno’s operations is due to high transportation and manufacturing costs, making milk processing at the facility no longer financially viable.
Instead, Synlait will concentrate its dairy processing activities at its Dunsandel plant, which will continue to serve as the hub for the company’s dairy operations.
For its supplier relationships, Watson reassured stakeholders that Synlait will fulfil all contractual obligations to its 54 farmer suppliers in the Waikato region, including incentive payments.
He emphasised the company’s commitment to supporting these farmers, stating: “What will change is that Open Country will be collecting and processing their milk”.
While the board does not actively seek to sell the Pōkeno facility, it remains open to considering compelling offers should they arise.
This pivot reflects Synlait’s adaptive approach in a competitive dairy market increasingly influenced by consumer demand for plant-based alternatives.
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