Wednesday, 03 April 2019 08:58

Westland keen to sell Yili deal

Written by  Sudesh Kissun
Peter Morrison. Peter Morrison.

Westland Milk Products' board is working to convince farmers to vote in favour of its sale to Chinese dairy giant Yili.

Within 24 hours of signing a deal with Yili, Westland Milk Products chairman Pete Morrison was back on the West Coast talking to farmer shareholders.

Morrison says the Westland board members were keen to talk to farmers “as fast as we could and explain the deal”.

Yili, which owns Oceania Dairy in South Canterbury, will pay $588 million for Westland Milk at $3.41/share. Westland’s farmers paid $1.50 per share.

Morrison was accompanied to Auckland for the signing by deputy chair Katie Milne and board members Andrew MacPherson and Brent Taylor.

After returning from Auckland, the board held seven pocket meetings with farmer shareholders on the West Coast and in Christchurch.

Morrison says more meeting are planned in coming months; farmer shareholders will vote on the deal at a special general meeting early July.

“The board believes this is a very good deal; farmers will now think about it and then vote on the deal,” he told Rural News.

He admitted that some shareholders were dismayed by the prospect of a proud New Zealnd co-op disappearing. 

“It’s a big deal for our farmers and the dairy industry throughout NZ.

For the deal to pass, at least 50% of Westland’s 350 farmer shareholders must vote, with 75% in favour.

ili has guaranteed to collect milk and pay a competitive payout of a minimum of the Fonterra farmgate milk price for 10 seasons from the season commencing August 1, 2019.  

A supplier committee of five representatives from existing Westland suppliers and five representatives from Westland under the new ownership will be formed to maintain communications and transparency between existing Westland suppliers and Westland.

Morrison says the board was looking for a guaranteed milk price, guaranteed milk pick-up and maximum value for existing shares in Westland.

He says Westland shareholders know they haven’t been receiving a competitive milk price for several years. 

“Farmers on the West Coast need a really competitive payout for their own survival.”

More like this

Strong wool eyes China

China looks set to play a key role in helping the New Zealand wool sector shift away from trading as a commodity supplier.

Strong growth for Yili's NZ operations

Chinese dairy giant Yili Group says its New Zealand operations are on track for strong revenue growth in 2025 after recording significant year-on-year growth for the first half of the year.

NZ wine grapples with oversupply despite export gains

The large 2025 harvest will exacerbate the wine industry's "lingering" supply from recent vintages, New Zealand Winegrowers Chief Executive Philip Gregan told attendees at Grape Days events around the country in June.

Featured

Owl Farm marks 10 years as NZ’s first demonstration dairy farm

In 2015, the signing of a joint venture between St Peter's School, Cambridge, and Lincoln University saw the start of an exciting new chapter for Owl Farm as the first demonstration dairy farm in the North Island. Ten years on, the joint venture is still going strong.

National

Machinery & Products

» Latest Print Issues Online

The Hound

Quid prod quo?

OPINION: Ageing lefty Chris Trotter reckons that the decision to delay recognition of Palestinian statehood is more than just a fit…

Deadwood

OPINION: A mate of yours truly recently met someone at a BBQ who works at a big consulting firm who spent…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter