Synlait CEO Resignation Highlights Deeper Challenges Facing Dairy Processor
A revolving door of chief executives at milk processor Synlait is a warning sign, says Lincon University senior lecturer in agribusiness Nic Lees.
The Yili-owned business is excited about what can now be achieved in the future, says chief executive Richard Wyeth.
Wyeth told Rural News that the first quarter performance in 2023 was strong, despite significant challenges, including subdued ingredient prices and rising costs.
"Overall, the business is well placed for 2023," says Wyeth, who joined the company two years ago from Miraka. "We are excited about what can now be achieved for the future."
He concedes that ingredient prices are more subdued in 2023, which will impact on revenue.
"However, the team in China sees the market being reasonably stable over the coming 12 months with balanced supply and demand but we are also positioned well in other international markets for future growth."
Following Westland's acquisition of North Island butter processor Canary in 2022, Canary posted a 28% revenue increase over budget forecasts and increased profit by 129% ahead of budget for the year.
Wyeth says its value-added stratefy is going from strength to strength.
A strategy focusing on high value products and a culture shift among the workforce guided Westland Milk to hit $1 billion in annual revenue for the first time.
Wyeth says that, as part of its strategy refresh, the company implemented a lot of things to turn several years of losses into a $39m profit last year. It moved away from infant formula manufacturing and focused on high value products.
Owned by Yili Group since 2019, Westland Milk's total revenue for 12 months ending December 2022 was $1.04b. Farmers who supply the West Coast processor received a record $9.40/kgMS for their milk in 2022. Westland pays farmers a 10c premium above the forecast Fonterra milk price.
The company's milk payout contributed $535 million into the West Coast and Canterbury economies.
