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

It's all about economics

OPINION: According to media reports, the eye-watering price of butter has prompted Finance Minister Nicola Willis to ask for a 'please explain' from her former employer Fonterra.

Red line on dairy

OPINION: As India negotiates to open its borders to more global products, dairy is proving a sticky issue.

Farmland security

OPINION: Paranoia about foreigners is at an all-time high in the US and attention is now turning to foreign-owned farmland.

Cuddling cows

OPINION: Years of floods and low food prices have driven a dairy farm in England's northeast to stop milking its cows and instead charge visitors to cuddle them.

Featured

Why is butter so expensive in New Zealand? Fonterra explains

Kiwis love their butter, and that's great because New Zealand produces some of the best butter in the world. But when the price of butter goes up, it's tough for some, particularly when many other grocery staples have also gone up and the heat goes on co-operative Fonterra, the country's main butter maker. Here the co-op explains why butter prices are so high right now.

National

Machinery & Products

Fliegl offers effluent solutions

Founded in Germany as recently as 1977, today, the Fliegl Group employs more than 1100 workers, offering an expansive range…

» Latest Print Issues Online

Milking It

Taxonomy talk

OPINION: Is the Government's taxonomy proposal dead in the water?

Cynical politics

OPINION: There is zero chance that someone who joined Fonterra as a lobbyist, then served as a general manager of…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter