Synlait Refocuses Pōkeno Facility on Advanced Nutrition Amid Strategic Shift
Source: DairyNews.today
New Zealand-based dairy processor Synlait Milk has completed a strategic review of its North Island assets, including its Pōkeno manufacturing facility and the blending and canning operations in Auckland.
The review is a crucial step in the company’s broader recovery plan aimed at improving financial performance and streamlining operations.
Operational Shift in Pōkeno Facility
The strategic review explored multiple aspects, including potential ownership structures and the option of mothballing the Pōkeno facility. A key finding highlighted that dual processing of both dairy and plant-based proteins at Pōkeno negatively impacted operational efficiency. As a result, Synlait's Board has decided to refocus the Pōkeno operations exclusively on producing advanced nutrition products that do not rely on raw milk.
Synlait CEO Grant Watson commented on the outcome of the review: “The review has been detailed and thorough. It’s given us the insight needed to lift the financial performance of these world-class assets. We now have a pathway to ensure our North Island operations will be profitable in the future.”
Dairy Processing Consolidated at Dunsandel
The decision to scale back operations at the Pōkeno facility is driven by high transportation and manufacturing costs, which have rendered milk processing at the plant unsustainable. Instead, Synlait will consolidate its dairy processing activities at its Dunsandel facility, which will continue to serve as the company’s primary hub for dairy operations.
Despite the operational shift, Synlait remains committed to its 54 dairy farmer suppliers in the Waikato region. Watson reassured stakeholders that the company would fulfill all contractual obligations, including incentive payments. “What will change is that Open Country will be collecting and processing their milk,” Watson explained, underscoring Synlait’s continued support for its farmer network.
Open to Future Opportunities
While Synlait does not have immediate plans to sell the Pōkeno facility, the board remains open to considering compelling offers should they arise. This reflects the company's adaptive strategy in a dairy market that is increasingly shaped by evolving consumer preferences, including the growing demand for plant-based alternatives.
Synlait's decision to refocus the Pōkeno facility on advanced nutrition aligns with its long-term goal of enhancing profitability while remaining flexible to market trends. This strategic shift demonstrates the company's commitment to operational efficiency and meeting changing consumer demands.
Operational Shift in Pōkeno Facility
The strategic review explored multiple aspects, including potential ownership structures and the option of mothballing the Pōkeno facility. A key finding highlighted that dual processing of both dairy and plant-based proteins at Pōkeno negatively impacted operational efficiency. As a result, Synlait's Board has decided to refocus the Pōkeno operations exclusively on producing advanced nutrition products that do not rely on raw milk.
Synlait CEO Grant Watson commented on the outcome of the review: “The review has been detailed and thorough. It’s given us the insight needed to lift the financial performance of these world-class assets. We now have a pathway to ensure our North Island operations will be profitable in the future.”
Dairy Processing Consolidated at Dunsandel
The decision to scale back operations at the Pōkeno facility is driven by high transportation and manufacturing costs, which have rendered milk processing at the plant unsustainable. Instead, Synlait will consolidate its dairy processing activities at its Dunsandel facility, which will continue to serve as the company’s primary hub for dairy operations.
Despite the operational shift, Synlait remains committed to its 54 dairy farmer suppliers in the Waikato region. Watson reassured stakeholders that the company would fulfill all contractual obligations, including incentive payments. “What will change is that Open Country will be collecting and processing their milk,” Watson explained, underscoring Synlait’s continued support for its farmer network.
Open to Future Opportunities
While Synlait does not have immediate plans to sell the Pōkeno facility, the board remains open to considering compelling offers should they arise. This reflects the company's adaptive strategy in a dairy market that is increasingly shaped by evolving consumer preferences, including the growing demand for plant-based alternatives.
Synlait's decision to refocus the Pōkeno facility on advanced nutrition aligns with its long-term goal of enhancing profitability while remaining flexible to market trends. This strategic shift demonstrates the company's commitment to operational efficiency and meeting changing consumer demands.
23.09.2024
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