Wednesday, 17 April 2024 12:00

Poor investments backfire

Written by  Milking It

OPINION: Synlait's financial woes won’t be going away anytime soon.

The company is looking at divestments of its Pokeno plant and a canning operation in Auckland to raise capital and reduce debt.

While other dairy companies are making money despite tough economic conditions, where did Synlait go wrong?

For one, they spent millions on investments and then realised that they won’t generate as much profitability per dollar of capital that they invested.

A case in point is the $70 million they ploughed in to fit out Pokeno to manufacture plant-based milk. No other milk processor in NZ thought it fit to make such an investment. Poor investment decisions are coming back to bite Synlait.

More like this

Wyeth to head Synlait

Former Westland Milk boss Richard Wyeth is taking over as chief executive of Canterbury milk processor Synlait from May 19.

O Canada

OPINION: Donald Trump's focus on Canada is causing concern for the country’s dairy farmers.

Plant-based fad

OPINION: The fact that plant-based dairy is struggling to gain a market foothold isn’t deterring new entrants.

MVM struggles

OPINION: Nearly four years after buying a 75% stake in Southland processor Mataura Valley Milk (MVM), A2 Milk is still struggling to take the plant to profitability.

No backing down

OPINION: Fonterra isn't backing down in its fight with Greenpeace over the labelling of its iconic Anchor Butter.

Featured

Wool pellets to boost gardens

With wool prices steadily declining and shearing costs on the rise, a Waikato couple began looking for a solution for wool from their 80ha farm.

'Cheap seed comes with major risks'

Choosing pasture seed at bargain prices may seem an attractive way for farmers to reduce autumn or spring re-sowing costs, but it comes with significant risks, says the NZ Plant Breeders and Research Association (PBRA).

High commodity prices, farmer optimism bode well for event

The 2025 South Island Agricultural Field Days (SIAFD) chairman, Rangiora farmer Andrew Stewart, is predicting a successful event on the back of good news coming out of the farming sector and with it a greater level of optimism among farmers.

National

Miraka CEO steps down

The chief executive of Taupo-based dairy company, Miraka – Karl Gradon - has stepped down from the role for personal…

Machinery & Products

Bigger but not numb

When you compare a RAM 1500 or Chevrolet Silverado to a Ford Ranger or a Toyota Hilux, you will understand…

Good just got great

Already well respected in the UTV sector for performance, reliability and a competitive price point, CFMOTO has upped the ante…

Nedap NZ launch

Livestock management tech company Nedap has launched Nedap New Zealand.

» Latest Print Issues Online

Milking It

O Canada

OPINION: Donald Trump's focus on Canada is causing concern for the country’s dairy farmers.

Plant-based fad

OPINION: The fact that plant-based dairy is struggling to gain a market foothold isn’t deterring new entrants.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter