Synlait shares in trading halt
Listed Canterbury milk processor Synlait’s shares have been placed in a trading halt.
SYNLAIT MILK is intent on selling more to key customers and growing its infant formula and nutritional sales, chairman Graeme Milne told the annual meeting of shareholders last week.
The 2014 year was good for farmers but volatility made it difficult to consistently achieve profit margins, and changes in infant formula market regulations in China “added complexity”, he said.
“However we are now in a strong position to take advantage of increased sales in this market.”
But the benefit of greater infant formula and nutritional sales expected to be balanced out by increased operating and funding costs.
Milne said Synlait intended to update its milk supply pricing in January 2015 with an update to its FY2015 forecast in March 2015 and news of interim results.
Managing director John Penno said infant formula and nutritional markets were now almost 50% of the business, with 45% of sales committed to four multinationals.
Capital projects this year include the completion of a third spray drier and a large quality testing laboratory at Dunsandel.
Synlait increased its revenue in 2014 by 43% to $600 million, up from $420m in 2013 and above the forecast of $524m.
Analysis by Dunedin-based Techion New Zealand shows the cost of undetected drench resistance in sheep has exploded to an estimated $98 million a year.
Shipping disruption caused by Houthi rebels in the Red Sea has so far not impacted fertiliser prices or supply on farm.
The opportunity to spend more time on farm while providing a dedicated service for shareholders attracted new environmental manager Ben Howden to work for Waimakariri Irrigation Limited (WIL).
Federated Farmers claims that the Otago Regional Council is charging ahead unnecessarily with piling more regulation on rural communities.
Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand for their products.
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