Despite challenging dairying
conditions, Westland Milk Products has reported a solid end
of year result, including celebrating a record milk
The Hokitika-based company released its annual report this
morning, reporting a group profit of $12.9 million after tax;
up from $3.6 million last year.
Westland's subsidiary Easi Yo also had a record year, with a
turnover of $45m.
The factory took in 689 million litres of milk, which was
converted into 108,000 tonnes of product for sale, generating
revenues of $535m.
Chief executive Rod Quin said the 2012-13 season delivered a
competitive pay-out of $6.34 per kgMS from which 30c was
retained for on-going investment.
He said as the season got under way, the company "enjoyed
higher than predicted milk flows", up 15 per cent on
"However, the rain came, milk flows declined and early in the
new year we were hit with a flood event that washed out part
of the Wanganui River bridge. This was followed by a declared
drought in the later part of the season.
"The drought reduced earlier production forecasts and sent a
message to customers that the international market was going
to be short of product; as a result prices increased."
Despite the drought and a number of quality and market access
issues during the year, including the Fonterra botulism
scare, the year finished strong.
Milk flows were up over 6 per cent, pricing relative to
Westland's competitors was up more than 7 per cent and fixed
expenses were down 7c per kgMS on budget.
"The pressures of the flood and the drought also highlighted
the value of diversity of supply, and the collaborative
spirit of the industry to assist in times of adversity," Mr
The season also saw Westland's suppliers expand, with new
suppliers contributing more than 10 per cent of the milk
"These irrigated farms were important during the drought as
they maintained milk flow into the co-operative when many
West Coast farms had dried off early."
Mr Quin said the season saw "marked progress" in the strategy
to grow milk supply, offer year-round supply and enter new
markets with new value-add products.
"We are shifting our focus from a traditional ingredients
supplier to a producer of higher-value nutritional products.
This strategy will return increasing value to shareholders
through a more profitable product mix and less reliance on
the volatile commodity markets."
Mr Quin said this season had also started well with record
milk flows also recorded.
"This has been driven by a combination of a further 20 farms
joining the co-operative and increased productivity on
The company is forecasting $7.60-$8.00 per kgMS for the
- by Rebekah Fraser of
the Hokitika Guardian