Mur­ray Goul­burn loses sup­pli­ers

Shepparton News - Country News - - FRONT PAGE - By Ge­off Adams

Mur­ray Goul­burn Co-op­er­a­tive has recorded a first-half-year loss of about $31.9 mil­lion and has suf­fered a 20 per cent re­duc­tion in milk sup­ply.

The big milk pro­ces­sor has also ex­pe­ri­enced a 14 per cent cut in rev­enue com­pared to the same pe­riod last year.

While the re­sult looks dis­ap­point­ing on pa­per, new manag­ing di­rec­tor Ari Mervis said the fi­nan­cial re­sults were not un­ex­pected in a par­tic­u­larly chal­leng­ing year.

Mr Mervis said it was flagged in Oc­to­ber last year that there would be a debt gen­er­ated due to the at­tempt to main­tain a com­pet­i­tive milk price.

So, he said, the fi­nan­cial re­sult was broadly in line with last year.

‘‘Record rain­falls and high lev­els of com­peti­tor ac­tiv­ity have re­duced our milk in­take, im­pact­ing rev­enue and our abil­ity to fully re­cover fixed costs and over­heads,’’ Mr Mervis said.

‘‘In ad­di­tion, although the re­cent in­creases in the global prices of dairy commodities are wel­come, they have not re­cov­ered in time to im­pact on MG’s first half sales vol­umes.’’

The com­pany has blamed ag­gres­sive mar­ket com­pet­i­tive­ness for milk sup­ply and seasonal con­di­tions for the big drop in milk sup­ply.

Mr Mervis said there were about 350 sup­pli­ers who had left the co-op­er­a­tive since May but there were still about 2200 sup­pli­ers and his fo­cus was on them and re­tain­ing them by ob­tain­ing the best he could for them.

He said the com­pany was pur­su­ing cost re­duc­tions and af­ter last April more than 200 po­si­tions had been re­moved from the cor­po­rate of­fice, gen­er­at­ing sav­ings about $10 mil­lion to $15 mil­lion in the cur­rent fi­nan­cial year.

When fully im­ple­mented it will cre­ate about $50-$60 mil­lion of sav­ings an­nu­ally.

A com­pany as­set re­view is un­der way which Mr Mervis said was be­ing pur­sued with dili­gence and rigour.

Mr Mervis said he was aware of spec­u­la­tion about the fu­ture of the Rochester fac­tory but he said no de­ci­sions had been made.

‘‘It would be pre­ma­ture to draw any con­clu­sions.’’

The out­look was more favourable with on-farm con­di­tions and global con­di­tions.

‘‘While there is a lag on the ben­e­fit of those com­mod­ity prices if they are more favourable and op­ti­mistic, there is a gen­eral con­sen­sus that things are look­ing more pos­i­tive.’’

Mr Mervis will be vis­it­ing sup­pli­ers in the re­gion dur­ing the next few weeks.

He said he wanted to re­build trust and con­fi­dence in the com­pany.

Mur­ray Goul­burn is fore­cast­ing a full year milk price of $4.95/kg, with the cur­rent av­er­age about $4.92.

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