Stan­hope plant a game changer

Dairy News Australia - - OPINION -

The re-open­ing of Fon­terra’s Stan­hope plant is a game changer for the dairy in­dus­try. In a volatile global en­vi­ron­ment, it has strength­ened the com­pany’s strat­egy of di­ver­si­fied sales and in turn lifted far­m­gate prices to its sup­pli­ers. It has in­vested $130 mil­lion to se­cure its place in the world mar­ket, and se­cure ad­di­tional sup­ply in Australia. It has based its in­vest­ment de­ci­sion on growth ar­eas both in a ge­o­graphic and con­sumer sense. Fon­terra chair John Wil­son told those at the launch that the com­pany’s cheese, whey and nu­tri­tion­als strat­egy, based in Australia, “is crit­i­cal to the growth and drive in de­mand that is re­quired from an in­creas­ingly de­mand­ing con­sumer base glob­ally”. The new plant has en­abled the com­pany to of­fer a di­verse port­fo­lio of prod­ucts into re­tail, food ser­vice and in­gre­di­ents. The com­pany has said it won’t re­peat its past mis­take of of­fer­ing prices to farm­ers it can’t af­ford and with its di­verse prod­uct lines should be able to with­stand mar­ket storms. It has put its Aus­tralian sup­pli­ers through great pain over the past 18 months so sus­tain­able pric­ing is the least they can of­fer. While Fon­terra’s re­build is com­plete, Mur­ray Goulburn has been forced to close fac­to­ries to cut costs and en­sure those re­main­ing run as ef­fi­ciently as poosi­ble. Although its hand has been forced, MG Man­ag­ing Di­rec­tor, Ari Mervis, told a brief­ing on the re­lease of its an­nual re­sults that it didn’t need to be big to max­imise prof­its. It was align­ing its strat­egy and con­cen­trat­ing its milk on where it would be most prof­itable. This is good news to those who openly ques­tioned the for­mer man­age­ment’s de­ci­sion to align with Coles on drink­ing milk. It was also work­ing on cor­rect­ing an “un­fo­cused growth agenda” cre­ated by pre­vi­ous man­age­ment While a strong Fon­terra is good for its sup­pli­ers, a com­pet­i­tive Mur­ray Goulburn would be good for the whole in­dus­try.

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