increase font size
Synlait supplier Willy Leferink says farmers are waiting to see what happens to the troubled milk processor.
Synlait farmers can do nothing but watch from the sidelines as the company battles its financial woes, says supplier Willy Leferink.
The former Federated Farmers dairy chair says farmers are waiting to see what happens to the listed milk processor.
Leferink is one of many Synlait suppliers who have handed a twoyear cessation notice to the troubled processor. He’s unhappy with the company’s performance and payout. Synlait has about 300 suppliers, sending milk to its two plants – at Dunsandel and Pokeno. It has revealed that more than half of its supplier base wants to leave.
“Let me make it clear, we have no problem with Synlait’s staff, they are excellent,” Leferink told Dairy News.
“What we are disappointed with is Synlait’s performance and payout. They are also $1 lower in the advance compared to Fonterra which creates quite a bit of cashflow stress,” says Leferink.
In April, Synlait reported a $96 million half-year loss. Last month, it signalled fullyear earnings will be at the lower end of its $45m-$60m range, before expected one-off charges.
Leferink believes Synlait directors should have “rattled the cage earlier”.
He noted that it’s a company problem, not an industry one. Synlait overstretched itself when it built a plant in the North Island a couple years ago and made some other regrettable decisions, according to Leferink.
He also believes a float of Synlait could be on the cards
Leferink says farmer suppliers feel they can’t do anything but “wait and see what happens next”.
He says suppliers have had hard conversations with both management and the board, where the suppliers’ position has been made clear.
“If they want to get their suppliers back, they need to do better than what they do now.”
Leferink says Synlait burned through a lot of trust and goodwill in its supplier base over the past season due to its payout not matching Fonterra’s and the financial struggles that resulted from that.
Synlait chief executive Grant Watson believes the company still presents an excellent value proposition to farmers, “with our best-in-class Lead with Pride programme and attractive specialty milk premiums [being] stand out features”.
“We are pleased to confirm a competitive advance rate profile for the 2024/25 season, with an opening advance rate of $6/kgMS,” he says.
“The new profile accelerates the proportion of the full season milk price paid throughout the season.”
Synlait’s latest market update piled more bad news on shareholders and sending its share price to a new low of 30c last week. The company is now forecasting that it’s unlikely to meet three of its current banking covenants as at 31 July 2024.
OPINION: Recent media commentary from Southland Federated Farmers has raised concerns among our rural communities, particularly around Environment Southland’s approach to winter grazing inspections and nitrogen reporting. But let’s be clear, much of what’s been said simply doesn’t reflect reality.
OPINION: Environment Canterbury's (ECan) decision recently to declare a so-called “nitrate emergency” is laughable.
A shameless political stunt is how Federated Farmers is describing the Canterbury Regional Council decision to declare “a nitrate emergency” on the back of its latest annual groundwater quality survey.
Federated Farmers say Environment Canterbury's decision to declare a 'nitrate emergency' is a shameless political stunt that won't help anyone.
Farmers want the Government to scrap controversial freshwater rules that "put river spirits and ideology ahead of practical water use", says Federated Farmers board member Mark Hooper.
ANZ New Zealand is encouraging farmers and businesses impacted by the recent extreme weather that hit Southland and South Otago last week to seek support if they need it.
When Professor Pierre Venter takes up his new role as vice chancellor at Massey University next February it will just be a matter of taking a few steps across the road to get to his new office at the Palmerston North Campus.
Two rural data organisations - DairyNZ’s DairyBase and Farm Focus - have formed a new partnership that aims to remove data duplication and help provide more timely, useful benchmarking insights for farmers.
BNZ says it is backing aspiring dairy farmers through an innovative new initiative that helps make the first step to farm ownership or sharemilking a little easier.
LIC chief executive David Chin says meeting the revised methane reduction targets will rely on practical science, smart technology, and genuine collaboration across the sector.
Lincoln University Dairy Farm will be tweaking some management practices after an animal welfare complaint laid in mid-August, despite the Ministry for Primary Industries (MPI) investigation into the complaint finding no cause for action.
OPINION: Voting is underway for Fonterra’s divestment proposal, with shareholders deciding whether or not sell its consumer brands business.
OPINION: Politicians and Wellington bureaucrats should take a leaf out of the book of Canterbury District Police Commander Superintendent Tony Hill.
