New Zealand dairy processor and plant-based nutritional products brand Synlait has dropped plans to sell its Pōkeno factory, which will now focus exclusively on products not requiring raw milk.
The company said in an announcement to the NZ Stock Exchange today that it has completed a strategic review of its North Island assets, the evaluation including whether to mothball the Pōkeno facility and how to balance its capability to process dairy and non-dairy hybrid nutrition products.
The company said one of the review’s findings was that switching between processing plant-based proteins and dairy hinders the Pōkeno plant’s operational efficiency. In addition, it found that transportation and a number of manufacturing costs mean it is not financially viable for Synlait to keep processing milk at Pōkeno.
Therefore, Synlait’s Board and Management have decided to focus Pōkeno’s operations solely on producing advanced nutrition products which do not require raw milk.
Synlait CEO Grant Watson said, “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 profitability in our North Island operations.”
Synlait has 54 farmer suppliers in the Waikato and the company said it will meet all of its contractual obligations to them, including incentive payments.
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