Mur­ray Goulburn con­firms $5.20kg/MS

Dairy News Australia - - FRONT PAGE - ROD­NEY WOODS

MUR­RAY GOULBURN will ac­cept for­mal pro­pos­als from other busi­nesses but any change in own­er­ship would need to be ap­proved by farm­ers. Mur­ray Goulburn CEO Ari Mervis has told sup­pli­ers the com­ing months will be piv­otal for the fu­ture of the busi­ness as the board and man­age­ment fi­nalise sub­stan­tial busi­ness im­prove­ment pro­grams. He said third par­ties would be “given an op­por­tu­nity to sub­mit for­mal pro­pos­als to the com­pany”. “Own­er­ship of Mur­ray Goulburn re­mains with our farmer sup­pli­ers,” Mr Mervis said. “Our con­sti­tu­tion re­stricts any one owner to 0.5 per cent of the is­sued cap­i­tal. To change this, 90 per cent of our farmer share­hold­ers would need to agree.” Mr Mervis said Mur­ray Goulburn would con­sider debt fund­ing milk price pay­ments by up to $100 mil­lion if it suf­fers fur­ther re­duc­tions in milk sup­ply. It has bud­geted sup­ply fall­ing to 2 bil­lion litres. “Our fo­cus is on main­tain­ing a com­pet­i­tive milk price to shore up the two bil­lion litre lower milk in­take that we have and, given that lower ca­pac­ity, al­lo­cate our milk in­take to those prod­uct streams that are the most prof­itable,” he said. “We came out ear­lier than usual with our open­ing price in re­sponse to sup­pli­ers who wanted us to come out early. We are main­tain­ing $5.20/kg MS and our un­der­ly­ing as­sump­tions sup­port this price. “We also have $100 mil­lion of fund­ing in place if re­quired to sup­port this price.” Mr Mervis ad­mit­ted the past fi­nan­cial year had “tested the strength and re­solve of MG and its sup­pli­ers”. “What sup­pli­ers can ex­pect in the com­ing year is a com­mit­ted man­age­ment team that will do every­thing it can to re­store farm gate milk price,” he said. “Un­for­tu­nately th­ese things are not solved overnight; we need to work through the is­sues thoroughly and prop­erly.” In terms of the com­pany’s fi­nan­cial po­si­tion, Mr Mervis said the dif­fi­cult de­ci­sions that had been made were show­ing pos­i­tive re­sults. “Hard de­ci­sions taken are start­ing to pay off,” Mr Mervis said. “We have man­aged our debt level down, ex­ceeded our tar­get in work­ing cap­i­tal re­duc­tion and are fo­cused on im­prov­ing re­turns across the busi­ness. “Clearly there is still work to be done. The price that we have paid is not as com­pet­i­tive as some of our com­peti­tors out there, and some of our sup­pli­ers have been un­der some fi­nan­cial stress and have taken the de­ci­sion to move to other pro­ces­sors.” One of those to move on is In­ver­gor­don farmer Mark Nor­man, who now sup­plies Aus­tralian Con­sol­i­dated Milk. “There is no doubt in my mind that I wouldn’t have been able to milk cows for an­other 12 months on their (Mur­ray Goulburn’s) prices,” Mr Nor­man said. De­spite this, Mr Nor­man said there would be a dif­fer­ent feel­ing around the in­dus­try if a new owner took the reins. “It is such a great com­pany and an icon of the in­dus­try, it would be a sad day for the dairy in­dus­try if it were to be sold.”

Ari Mervis

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