Westland Milk Products has trumped Fonterra by announcing a
final payout of $6.34kg/ms before retentions for a ''tough''
The payout, with a retention of 30c, was a 7% increase on the
initial season opening budget by New Zealand's second-largest
dairy co-operative. Fonterra has confirmed a $6.30 payout
before retentions of 14c.
Westland chief executive Rod Quin described it as a
satisfying result given the tough farming and trading
conditions, which included a major flood in South Westland
followed by one of the worst droughts in living memory for
most on the Coast.
Milk volumes from shareholders were up 5.7% at 621 million
litres and milk purchased from other dairy processors
contributed a further 68 million litres.
Turnover remained steady at $535 million, up from $534
million last year, with a high New Zealand dollar dampening
the high market prices in the second half of the season.
The results were a testament to the resilience and
resourcefulness of the co-operative's shareholders and staff,
Mr Quin said.
Westland ended the financial year with a slightly lower
equity to assets ratio than last year at 49%, down from 51%.
That reflected the co-operative's recent investments,
particularly in the development of new plant for the
manufacture of specialist nutritional products such as baby
The results confirmed Westland's strategic decision to move
from being a manufacturer of ingredients, to being a supplier
of added-value nutritional products which returned higher
prices for the company and better results for shareholders,
Mr Quin said.
The co-operative's financial position meant it was well
placed to continue that strategy.
The new nutritionals plant would be operating to full
capacity in the 2013-14 season and options for further
development were being investigated.
While early in the season, milk volumes were 10% above budget
and payout predictions were at a near record high.
The most recent 2013-14 season forecast was $7.60-$8kg/ms.
Federated Farmers West Coast dairy chairman Richard Reynolds
said Westland deserved credit for making a $6.34 surplus, as
the season ''must rank as one of the weirdest we've had here
on the Coast''.
The difference in the final payout between Westland and
Fonterra was due to Fonterra retaining 14c kg/ms, while
Westland retained 30c kg/ms.
''We are comfortable with what Westland is retaining despite
it leaving us with slightly less cash in the hand at
''Retentions are vital to grow our co-operative and while we
may benchmark ourselves to Fonterra, we must not fall into
the trap of trying to go toe-to-toe with them,'' Mr Reynolds
After the deregulation of the New Zealand dairy industry in
2001, nearly all of the dairy co-operatives amalgamated to
create Fonterra, while Westland Milk Products shareholders
voted to remain an independent co-operative.