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New ways of working at board and management levels have led to a change of culture at Westland Milk Products, with a brighter outlook and growing shareholder confidence in the company, said Chairman Pete Morrison in the company’s 2017 Annual Report released today.

Commenting on the 2016-17 season, Morrison said extensive new thinking had come into the company with new management, a revised board structure and better ways of working.

“The 2016-17 financial year for Westland Milk Products was characterised by challenge and change,” Morrison said. “We began the 2016-17 year under considerable financial pressure. Shareholders, quite rightly, were demanding answers and calling for both the board and management to do much better and reverse the loss making result of the year before.”

Morrison said shareholders, boosted by an industry-competitive payout prediction for 2017-18 in the $6.40 to $6.80 range, are now exhibiting more confidence in their company.

“We have a new way of working at board and management levels, and this has permeated throughout the staff, where I am seeing and hearing a new confidence and culture emerging.

“This is something that I believe will be reflected within our shareholder community as we restore and grow pride in our company and utilise its heritage as an asset. Establishing our point of difference and securing our place in a growing and increasingly diverse international market is vital.”

Westland Chief Executive Toni Brendish, who has just completed her first year in the role, said Westland has been overhauling its structure and business systems.

“There was a lot of excellent work going on – but the company was not operating in a way that would build and sustain a prosperous future. To that end, we looked at all aspects of our business operations and also structure. We drove change from the very top bringing in new leaders at senior management level, while simultaneously examining every role in Westland to ensure the position was needed, working efficiently, and whether the right people were in the right place to deliver on the company’s objectives.

“We looked at our processes with a focus on ‘ruthless efficiency’ and considered our costs. Ultimately, it was costing our company a lot more to process its ‘bucket of milk’ than our competitors, and this had to change.

“We are on track to achieve our target of $78-million in savings (equivalent to $1.20 per kilo of milk solids) through increased efficiencies and reduced costs across key areas of our operation. We focused on: making it right first time, efficiencies in transportation and logistics, getting our sales and IT right, improving procurement processes and contracts, and getting much better at sales and operating planning.”

But, Brendish said, the cost savings achieved by Westland could not be a one-off.

“The efficiencies and savings have to be embedded as part of the way we work; this has included a review of our strategy to ensure it was fit for purpose for the dairy market and, more specifically, the future of Westland.”

Morrison said that during 2016-2017 the company’s balance sheet strengthened, capital investment was carefully controlled and this, in conjunction with other cash management initiatives, allowed full repayment of all short term debt, and an improvement in the debt/equity ratio.

He also highlighted Westland’s environmental achievements, noting that shareholder performance across a wide range of environmental measures had improved considerably (details in the full annual report linked to below).

“The value of this work to our company cannot be overestimated,” he said. “Environmental compliance and sustainability is not a temporary issue that gained prominence during the 2017 general election.

“It is an issue that will be with us for a long time because it relates to our very licence to continue farming and pass our businesses and our land on to future generations. It also helps establish our point of difference for customers who are increasingly demanding an environmental bottom line in their audit of our performance.

“We have worked very hard to build a great future for Westland – it’s shareholders, staff and the communities in which we live, work and play. We want a future in which we’ll be proud to say we make beautiful, nourishing products, and proud to be part of a dynamic company that will continue to make a vital contribution to our economy, our communities and our people.”

Westland Milk Products 2017 Annual Report

ENDS

Media inquiries to:
Steve Attwood
Communications Manager
E: communications@westland.co.nz
P: 03 943 0580
C: 027 4191080

 

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