Get prepared for a ‘Now Normal’ future, says Ian Proudfoot – Global Head of Agribusiness for KPMG – discussing the likely effects of COVID-19 in the months to come.
In the latest TalkMilk newsletter to shareholders, Open Country Dairy (OCD) chairman Laurie Margrain says the company’s balance sheet is in an ‘extremely conservative position’ and it will continue to preserve capital.
However, he says this does not mean OCD will not consider investments that will ‘enhance the future capacity of the business to perform strongly and pay suppliers well’.
Margrain adds that the company’s approach has always been to value capital highly and only invest when it can see clear and obvious benefits to all stakeholders – including its farmer suppliers.
“That being the case, we are taking a very cautious approach to the investment plans we currently have,” he explains. “We have continued to make all the required preparations for those investments, but we are being cautious for now.”
Margrain says paying farmer suppliers earlier than other dairy companies remains the company’s paramount focus.
“We were pleased to do so again in late March,” he wrote. “Your financial health is important and working to benefit your cash flows is our priority.”
Meanwhile, Margrain told farmer supplier it was pointless trying to predict the timeframe and steps of the current COVID-19 situation.
“We can only control what we can, have belief in the fact we will come out of this and do your best for New Zealand.”
He says dairy farmers may even get to enjoy the fact that the sector is now getting more credit for the positive aspects of its importance to New Zealand.