Chairman Pete Morrison said a report from a strategic review of the company being done by Macquarie Capital and DG Advisory will be available for shareholders.
The quest is to find a sustainable capital structure and competitive milk price.
The three options are to stay with its plan of joint ventures, retentions and bank borrowing, to find a cornerstone investor or to look at a sale or merger.
Shareholders asked for the structural review but Morrison said there isn’t a mood for any of the possible outcomes.
Westland’s 2018 financial results will be published at the end of September with an expectation that its final milk price for the season will be about $6.20/kg milksolids or 50c less than Fonterra.
The previous season Westland paid more than $1 below Fonterra.
Milk collection last season would be similar to the 65m kg MS of 2016-17 despite the disruption to farming, tanker transport and processing caused by ex-cyclone Fehi in February, he said.
Westland channels about 15% of its milk into added-value products such as infant formula, UHT milk and cream packs and retail Westgold butter packs and is on track to double that proportion in short order.
Consumer butter was launched two years ago and sold 1m packs in the first year and 2m in the second.
To expand the range of segregated, higher-value products such as grass-fed and A2 protein the company will need new and increased capital, Morrison said.
“We have relatively high debt levels and limited financial flexibility and therefore it is now timely to look ahead and consider the options that can provide a sustained, higher payout and improve the company’s financial flexibility.
“Obtaining new capital would make a significant difference to the co-operative,” he said.
In the 2017 annual results Westland had $250m of debt, being about 40% ratio of debt-to-debt-plus-equity.
It had a $1.50 share standard and 72m shares issued, including six different share types arising from historical agreements.
Morrison said he won’t comment on the possibilities or indicate any preference, except to emphasise the need for new capital.
One industry commentator said Westland has to change to survive and Fonterra and Synlait are alternative processors for Canterbury and Murchison farms.
Speculation since the review was announced included full or partial sale to the Talley-owned Open Country Dairy, a merger with fellow farmer co-operative Fonterra or a substantial investor.
In that regard Westland already supplies milk powder to Ausnutria through a joint venture blending and canning facility at Rolleston, Canterbury.
Ausnutria is a Hong Kong-listed infant formula company.
Morrison said Westland is not building or expanding processing facilities.
The new season began with a sizable new supplying shareholder in Southern Pastures, with its nine Canterbury farms and more than 4m kg annual milk output.
The season in Canterbury began with a hiss and roar, reflecting good weather conditions, while on the West Coast milk output is as expected, he said.
