What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
The new deal, launched recently, aims to reduce input costs and improve on-farm profitability for Synlait's 300 farmer suppliers.
The deal includes "unique Synlait pricing" nationwide for any farmer supplier, exclusive monthly seasonal offers and fuel discounts. Synlait farmers also gain access to all of Farmland's existing discounts and rebates through its 7000-strong card partner network. Farmlands is also offering free delivery on orders over $500.
Synlait director of on-farm excellence & business sustainability Charles Ferguson told Dairy News that the milk processor is always looking at ways to add value to their farmer suppliers' businesses.
Ferguson says the past 24 months have been tough for farmers, with heightened cost pressures on farm.
"At its peak last year farmers were facing double digit rise in input costs across their business," he says.
Ferguson says Synlait is pleased to team up with a leading agri retailer to help lower cost for its farmers.
"With 300 farmer suppliers we are always looking at how to leverage the scale and drive down costs for our farmers and our business. This partnership with Farmlands will ensure sharp deals available for our farmer suppliers."
Farmlands chief executive Tanya Houghton told Dairy News that she saw a natural connection between the two organisations.
"As a co-op, Farmlands is focused on enhancing the profitability and productivity of New Zealand farmers and growers.
"We'll do this by supporting our customers to access core farm inputs - including feed, animal health, fuel, fertiliser and ag-chem - at the best price and with the best support.
"By teaming up with Synlait suppliers, we can now boost their suppliers' profitability even more by offering them extra value across the key inputs they need month in, month out."
Events have been held around the country to launch the deal. The final launch event takes place at Huntly Farmlands on Wednesday, March 20.
To mark the launch, Darmlands is offering a few exclusive deals including a tiered fuel pricing structure, where the more Synlait suppliers bring their bulk fuel over to Farmlands and Fern Fuel, the better the price is for everyone.
Synlait farmer suppliers who bring their Ballance account to Farmlands will get a $100 vouher. Ballance is Farmlands' preferred partner for fertiliser.
Synlait farmers also get early-access and exclusive deals on new products like new pigtail standards due to arrive in April.
Farmlands says that as New Zealand's largest rural supplies co-operative, it was created to disrupt the historical lock-up of rural suppliers, by using the power of a combined buying group to reduce costs for farmers and growers.
"At Farmlands we're proud to be 100% New Zealand owned and still working for the productivity and profitability of Kiwi farmers for the last 60 years and into the future.
"Our new partnership with Synlait will offer Synlait suppliers even more value and service on top of their existing Farmlands shareholding. It's just one example of how we plan to bring even greater value to shareholders' farm gate."
