Directors’ terms will increase from three to four years.
The changes were approved at the company’s annual meeting on November 27 when Keith Smith replaced David Spence as an independent director after 12 years.
Members also agreed to increase directors’ pay to be more in line with the industry standard.
Chief executive Rod Quin said the highlight of the meeting was announcing a higher operating surplus than Fonterra.
The 2012-13 operating surplus was $6.34 per kg of milksolids with a retention of 30 cents.
The net payout after retentions was smaller than Fonterra’s though.
“However, our shareholders strongly supported retentions as a means to remain competitive and to grow the co-operative strategically, delivering on investments,” he said.
“Retentions help fund projects such as the planned expansion of our infant nutrition capacity, which is central to our growth strategy.”
He acknowledged that another dairy company, Tatua, leads the industry in payouts and there is still room to improve.
“There are signs of this already with our current marketing and growth strategies generating better returns for the company and therefore shareholders.”
The meeting was told that progress on the new $23 million boiler was ahead of schedule.
“This installation will take the risk out of our energy supply and enable our older boilers to be decommissioned, producing considerable efficiencies in cost and energy use in the plant.”
The board also approved the first stage toward a new $100m dryer at Hokitika to grow the nutritionals capacity and start investigations into a UHT plant at Rolleston.
He said the company expect to produce and sell 122,000 tonnes of finished product with sales revenue in excess of $750 million, resulting in a forecasted operating surplus of $7.60 – $8/kg MS before retentions next year.
The forecast will be recalculated in December when more contracts are completed and foreign exchange cover is in place.
For the future, Quin said international markets, China in particular, continued to demand safe and traceable food and were prepared to pay higher than average prices to secure supply.
He also noted the challenges facing the dairy industry if it was to remain sustainable into the future.
“As a company we must ensure that the right to grow our farms and create wealth for shareholders and NZ is secure but that must be achieved within the context of responsible and sustainable practices.
“In this regard, Westland’s code of practice, which includes environmental and animal welfare standards and quality provisions will be a rigorous requirement of all shareholders,” Quin said.
