Canadian dairy heavyweight confident of Murray Goulburn buy
The head of Canadian dairy heavyweight Saputo believes the company will acquire the distressed dairy processor Murray Goulburn and says a top priority is to lift the processor’s annual milk volume to 2.5 billion litres.
Lino Saputo jnr, who is in on a 10-day roadshow meeting Murray Goulburn suppliers and industry figures, said his company might consider other acquisitions in the n dairy industry in future if suitable opportunities emerged and regulatory approval was allowed.
“Our balance sheet is very clean and our desire to grow is very, very big,” he told Fairfax Media. “So we have an appetite to grow, we have talent within the system that is always looking to take on more responsibility.
“Growth through acquisition has been really our model and that’s something that we will continue to do in all the platforms.”
On the prospects of lifting milk supply, Mr Saputo expressed confidence. “I’m quite optimistic that we would be able to pick up more milk in the various regions, get the plants running to a better level of capacity, allow them to be more effective and efficient, process that milk into value-added dairy solids and generate a good healthy return for the business,” he said.
Mr Saputo, who is the chairman and chief executive of Saputo, also acknowledged that the company had work to do to win the trust of MG suppliers. “We know that we’ve got to prove ourselves every day to the supplying community, by being able to talk to them quite frankly and openly,” he said.
“And I think that over the course of the three years that we’ve been already operating in , I think we’ve gained a great credibility within the farming community, with respect to the farmers that are supplying Warrnambool [Cheese and Butter]. It doesn’t happen overnight.”
He said his company believed it needed to pay “leading prices” to dairy farmers for their milk. He said it was “extremely important” that farmers who supplied Murray Goulburn with their milk made a fair profit on their farms.
“Without a profitable supplier, without a profitable dairy farmer we don’t have an industry,” he said.
“And I tell our employees that all the time. Without a good, strong dairy production base they don’t have jobs and we don’t have a business. So it is extremely important that the dairy farmer’s profitable and this is why we believe we need to be paying leading prices for milk.”
Mr Saputo’s current visit to (he was also here in October) comes shortly after Murray Goulburn announced it had entered into a binding agreement to sell its operating assets and operating liabilities to the Canadian company for about $1.31 billion.
Murray Goulburn announced the deal, which remains subject to the approval of MG farmer suppliers and other conditions including approval from the Foreign Investment Review Board and the n Competition and Consumer Commission, shortly before its annual general meeting in late October.
Mr Saputo, who landed in on Wednesday, said he would be attending about 15 “town hall meetings” with dairy farmer suppliers in different regions, and would also tour Murray Goulburn facilities.
On Thursday evening, Mr Saputo addressed about 150 dairy farmers who supply Warrnambool Cheese and Butter, the Victorian-based processor acquired by Saputo about three years ago.