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

Synlait snag

OPINION: Canterbury milk processor Synlait's recovery seems to have hit another snag.

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.

Featured

All eyes on NZ milk supply

All eyes are on milk production in New Zealand and its impact on global dairy prices in the coming months.

National

Machinery & Products

JDLink Boost for NZ farms

Connectivity is widely recognised as one of the biggest challenges facing farmers, but it is now being overcome through the…

New generation Defender HD11

The all-new 2026 Can-Am Defender HD11 looks likely to raise the bar in the highly competitive side-by-side category.

» Latest Print Issues Online

Milking It

Building trust

OPINION: The war of words between Southland farmers and Environment Southland over winter grazing inspections reflects a deep lack of trust…

No Joy

OPINION: Milking It understands a formal disciplinary process is being conducted by Victoria University of Wellington on what one of…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter