Milk price certainty
Westland Milk has reaffirmed its commitment to pay farmer suppliers 10c above Fonterra farm gate milk price for the following two seasons.
The much talked about figure was 30% percent, but the new chief executive, Toni Brendish, says the co-op still has not achieved this.
“The previous strategy was expressed as value added. As far as I am concerned, value added is not a strategy; I define value add as what you do, in other words an outcome.
“Having worked in fast moving consumer goods for nearly 30 years, I see value add as everything from your supply chain, your finance, marketing, products -- everything. Westland’s strategy needs to be fine-tuned: we want the outcome of selling more value add, and the strategy is how we achieve that.”
Brendish believes Westland’s move into Canterbury was a good strategy because it helped achieve efficiencies within the business.
WMP’s getting back on its feet will require people who can execute the new operation strategies, she says. Redundancies are inevitable, but no numbers are available yet because the review of the organisation is not finalised.
New product initiatives will kick in over the next three months, all in the higher margin category. The Westland team is focusing on efficiencies in sales and marketing and supply chain areas.
“Everyone including the shareholders is asking me for a time-line as to when things will happen. We have to get in place a number of things so that when we start the new season they have an impact. So we are talking August of this year.
“One reason for doing the review now is so that we are up and running and well prepared. A couple of other things probably won’t start to hit until the latter part of the year because they will require capital spending and various things. But we have to start seeing the benefit of the change from the start of the season.”
Being a small company enables WMP to be agile and to react quicker than larger companies -- an advantage, as is the uniqueness of the Westland story.
“I will probably tell it differently because of the person I am. There are many great stories to be told about how a cooperative works and how we are successful. People outside New Zealand love to hear how it evolved, and we want to connect the end user with the farmer; technology will make that happen. People will be able to see the farm, the cows and all aspects of the farming operation. For example, we know now that in China animal welfare is an issue for consumers.”
Brendish sees something special in the West Coast heritage. “It is almost more NZ than NZ and I think there is an opportunity to leverage off that.”
