Westland pays suppliers more than Fonterra

New Zealand’s second largest dairy cooperative Westland Milk Products has confirmed its 2012-13 operating surplus is $6.34 per kilogram of milk solids (kgMS), with a retention of 30c, a seven per cent increase on the initial season opening budget.  The milk price paid by Westland is favourable compared with the $6.12 cash payout received by fully shared up Fonterra suppliers. Chief Executive Rod Quin says that this is a satisfying result given the tough farming and trading conditions during the 2012-13 season. The 30c per kgMS retention will support the company’s strategic growth plan while the net pay-out to shareholders remains very competitive. In spite of the impact of a major flood event in South Westland then one of the worst droughts in living memory for most of the Coast, milk volumes from shareholders were up 5.7% at 621 million litres, and milk purchased from other dairy processors contributed a further 68 million litres. Turnover remained steady at $535 million, with a high New Zealand dollar dampening the high market prices in the second half of the season. “These results are a testament to the resilience and resourcefulness of our shareholders and staff” Quin says. “There is a huge focus on productivity and quality which runs through the whole company from our farmer shareholders and suppliers to the staff on the factory floor and the sales team that is maintaining and growing our position with key customers.” Westland ended the financial year with a slightly lower equity to assets ratio than last year at 49 per cent. This reflects the co-operative’s recent investments, particularly in the development of new plant for the manufacture of specialist nutritional products such as baby formula. “The results confirm Westland’s strategic decision to move from being a manufacturer of quality ingredients, to that of being a supplier of value-added nutritional products, which return higher prices for the co