Saputo chief fronts farmers

SAPUTO has explained its low opening price to suppliers in a series of meetings held across the region last week, which company CEO Lino Saputo Jnr came from Canada to attend.
In what was the first round of supplier meetings since the company made its opening price announcement, the Leongatha meeting was held last Tuesday.
Mr Saputo said the main purpose of the meeting was to explain why Saputo opened at $5.75 per kilogram of milk solids.
“The meeting covered why we chose that price and what our expectations are for the balance of the year,” he said.
Leongatha South dairy farmer Gordon Vagg said the meeting on Tuesday was “quite good”.
“Mr Saputo explained why it wasn’t the best opening price. He explained he doesn’t take gambles and wanted to show that Saputo was a stable company,” he said.
Mr Vagg said it was great to see Mr Saputo come from Canada to attend the meetings and thought he put forward an interesting message.
“He talked about loyalty and balancing out the needs of all the stakeholders in the business, not just the shareholders,” he said.
“I think the Murray Goulburn board got one thing right, it sold to the right company.”
Saputo now operates the former Murray Goulburn factory in Leongatha and Mr Saputo said the company planned to invest capital in the plant.
He said expansion of the Leongatha facility was possible.
“Right now, the Leongatha processing facility is being underutilised. Once it is running at a higher capacity, we can consider (investing in the factory),” he said.
In order to increase the utilisation of the Leongatha factory, Saputo needs to increase milk supply.
“It will take time for us to get suppliers back on board. While the (opening) price is important, at close we have had the leading price for the past five years,” Mr Saputo said.
“The opening price is just an indication of the season ahead, it is the closing price that matters.”
Mr Vagg said many in attendance at the meeting wanted to know how Saputo planned to increase its milk supply.
“One guy said Saputo didn’t open high enough to get suppliers back. Mr Saputo said the only way to get suppliers back was by restoring trust,” he said.
“Mr Saputo said it was more responsible than opening high. He said the worst thing would be to open too high and be unable to maintain that price.”
Mr Saputo said he agreed farmers were not being paid enough for their milk.
“Supplier’s inputs are going up, yet their revenue is going down. We want to take a leadership role in the industry and encourage suppliers to grow our base.
“Once the balance between supply and demand is there, the economy will be much better for dairy farmers.
“The future of the dairy industry is good all over the world. Consumption is consistently growing 2.5 percent per year, dairy is in growth mode.
“We just need to balance supply and demand.”

Talking milk: Saputo chief executive officer Lino Saputo Jnr, front fifth from right, was in Leongatha last Tuesday, for the first round of supplier meetings since the company announced its opening price. The meeting was well attended by local dairy farmers.

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Posted by Tayla Kershaw on Jul 17 2018. Filed under News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry