09 September 2024

Synlait completes North Island Strategic Review

Synlait has completed the strategic review of its North Island assets, including its manufacturing facility in Pōkeno and its blending and canning facility in Auckland.

The review was undertaken as part of Synlait’s business recovery plan. It explored a wide range of factors, including potential ownership structures, mothballing the Pōkeno plant, and how to balance its capability to process both dairy and plant-based proteins.

Synlait CEO Grant Watson commented: “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.”

One of the review’s findings was that switching between processing dairy and non-dairy hybrid nutrition products hinders the Pōkeno’s plant’s operational efficiency. In addition, it found that transportation and a number of manufacturing costs mean it’s not financially viable for Synlait to keep processing milk at Pōkeno.

Synlait’s Board has decided to focus Pōkeno’s operations solely on producing advanced nutrition products which do not require raw milk. The Dunsandel plant will remain the hub of the business for dairy operations.

Grant Watson said Synlait has 54 farmer suppliers in the Waikato and the company will meet all of its contractual obligations to them, including incentive payments.

“We are proud of our cohort of North Island farmers and enjoy working with them. They will remain Synlait suppliers until the end of their supply agreements and we will remain their first port of call for support. What will change is that Open Country will be collecting and processing their milk.”

The Board will not actively seek a buyer for Pōkeno, however, in the event a compelling offer was made for the asset, the company may consider it.