Synlait announces big financial loss while making an attempt to retain South Island suppliers, , and rural brand steps up for Auckland’s homeless with sock donation drive.

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Synlait announces big financial loss while making an attempt to retain South Island suppliers

Synlait Milk has unveiled its latest financial results, revealing significant challenges and a strategy to retain its farmer suppliers. The company reported a net loss of $182.1 million for the year ending July 31, despite a slight increase in revenue to $1.64 billion.

In a move to address its financial difficulties, Synlait's shareholders recently approved a capital raise of nearly $218 million. This decision will see Bright Dairy, the company's largest shareholder, increase its stake to 65%, while minority shareholders will hold a combined 14%.

Amid these changes, Synlait is making efforts to retain its farmer suppliers, many of whom have signalled intentions to withdraw their milk supply. The company has announced a one-off payment of 20 cents per kilogram of milk solids for South Island farmers who commit to continuing their supply until August 2025. North Island suppliers will receive a smaller incentive of 5 cents per kilogram.

For the past season, Synlait's final milk price aligns with Fonterra's at $7.83 per kilogram of milk solids. Including incentives, the total average payment reaches $8.11. Looking ahead, Synlait has raised its forecast for the current season to $8.60, although this now trails Fonterra's latest $9 forecast.

Grant Watson, Synlait's chief executive, acknowledges the company's challenges, including excess production capacity, high debt levels, and declining demand for infant formula. He emphasises the critical importance of maintaining a strong and stable farmer supply base for the company's recovery.

Looking ahead, Synlait's management is concentrating on growing its advanced nutrition and foodservice divisions while optimising operations. The company's ability to refinance its banking facilities next year hinges on improving its trading performance and retaining milk supply.

Fonterra unveils new strategy with big potential returns to farmer shareholders

Fonterra has unveiled a revised strategy that could lead to substantial financial gains for its farmer shareholders. The co-op is narrowing its focus to its high-performing Ingredients and Foodservice divisions, with plans to potentially divest its consumer businesses, including household names like Anchor and Mainland.

Fonterra's chairman, Peter McBride, emphasised that this new direction aims to maximise returns to farmers from both their milk and invested capital. The strategy, he says, paves the way for enhanced financial targets and policy settings, reinforcing the co-op's commitment to its farmer-owners.

The potential sale of Fonterra's consumer and associated businesses is no small matter. These operations currently account for about 15% of the co-op's total milk solids and 19% of its group operating earnings. While specific figures haven't been disclosed, the scale suggests the resulting payout to farmer shareholders could be significant.

The co-op plans to deliver the strongest farmer offering, enabling on-farm profitability and productivity. It aims to cement its position as a world-leading provider of sophisticated dairy ingredients while expanding its successful Foodservice business in China and other key markets.

Fonterra isn't stopping there. Chief Executive Miles Hurrell detailed plans for investment in efficient manufacturing and supply chain networks, allowing flexibility to allocate milk to the highest-returning products and sales channels. The co-op is also doubling down on sustainability, aiming to strengthen partnerships with environmentally conscious customers.

Innovation remains at the forefront, with Fonterra committed to leveraging science and technology to overcome challenges and build competitive advantages. This forward-thinking approach extends to financial planning, with the co-op promising to provide a rolling three-year forecast of its financial assumptions annually, offering farmers improved ability to plan for the future.

Hurrell says that despite significant upcoming capital investment needs, Fonterra can meet these requirements while maintaining a robust balance sheet. He expresses confidence that this is the right strategy for the co-op, with a clear vision of where it can best generate returns for farmer shareholders and unit holders.

Greenpeace sue Fonterra over marketing claims

Meanwhile the country’s dairy industry faces a fresh challenge as environmental group Greenpeace Aotearoa launches legal action against Fonterra. The lawsuit centres on the marketing claim that Anchor butter is 100% New Zealand grass-fed.

Greenpeace contends this claim is misleading, given that many Fonterra farmers use imported palm kernel as a feed supplement. The environmental organisation labels this marketing as greenwashing, arguing it creates a false impression of environmental friendliness and sustainability.

At the heart of the dispute is New Zealand's significant import of palm kernel extract, or PKE, a byproduct of Southeast Asia's palm oil industry. New Zealand leads the world in PKE imports, with the dairy sector bringing in nearly two million tonnes annually. This feed, while initially unappealing to cows, becomes a valuable energy and protein source when pasture is scarce.

Greenpeace raises concerns about the palm oil industry's links to rainforest deforestation, human rights violations, and threats to rare wildlife. They argue Fonterra's marketing overlooks these environmental and ethical issues associated with PKE use.

Fonterra, responding to the legal action, acknowledges receipt of the proceedings but declines further comment at this stage. Earlier this year, the co-operative defended its PKE use, stating it's an effective supplementary feed during periods of reduced grass growth, such as droughts. The company also asserted its commitment to responsible sourcing and monitoring of PKE use among its farmers.

B+LNZ appoints new CEO 

Beef + Lamb New Zealand has announced Alan Thomson as its new chief executive. 

Thomson will relocate from Australia to Wellington for the role, and brings a wealth of experience in agribusiness and technology. He joins B+LNZ from his current position as Director of Agribusiness at Hitachi Australia, where he focused on agritech innovations.

Board chair Kate Acland highlighted Thomson’s strong commercial background and his dedication to delivering positive outcomes for farmers. She says that Thomson's appointment aligns with B+LNZ's goal of helping farmers thrive and realising the sector's full potential.

Thomson's recent work involves cutting-edge agricultural technology, including projects to help farmers capture data for operational decisions that mitigate environmental impacts. His experience extends to roles at Ravensdown in both New Zealand and Australia, and he currently serves on the board of DataFarming, an Australian agritech company.

The incoming CEO emphasised his commitment to agriculture and his vision for the sheep and beef farming industry. His approach centres on using science and data to drive results, with a focus on enhancing farmer productivity and profitability in a sustainable manner.

Rural brand steps up for Auckland’s homeless with sock donation drive

Heritage woollen apparel company Norsewear is tackling an often overlooked need among Auckland's homeless community this October. The Hawke's Bay-based brand has kicked off 'Socktober', a month-long initiative aimed at providing quality woollen socks to those experiencing homelessness through Auckland City Mission – Te Tāpui Atawhai.

Throughout October, for every pair of socks purchased on the Norsewear website, the company will donate an equivalent pair to the Mission. This one-for-one scheme addresses a critical yet rarely considered need among the homeless community.

Tim Deane, owner of Norsewear says his team learned that while socks are crucial for foot health, they're infrequently donated to charities. The Auckland City Mission confirmed this gap in donations, highlighting how wet, unwearable socks often lead to foot health issues among the homeless.

Crafted in Hawke's Bay from merino and mid-micron wool, Norsewear socks offer warmth, comfort, and odour resistance – qualities particularly valuable for those without regular access to laundry facilities.

The timing of Socktober aligns with World Homeless Day on October 10th, amplifying awareness of the challenges faced by homeless individuals. 

Norsewear's Socktober initiative runs until October 31st. To purchase a pair of socks go to www.norsewear.co.nz

And to find out more about Auckland City Mission aucklandcitymission.org.nz