Business

Synlait nutritional half year profit is $12.3 million

Synlait has reported an underlying net profit after tax (NPAT) of $12.3 million for the first half of the 2016 financial year (HY16). In contrast to $0.4 million in HY15, this improved performance is primarily the result of increased nutritional sales in canned infant formula. “We’re glad to deliver a solid result for the first half of FY16. Our significant investment in customer and product development, people, plant and operating systems in recent years is beginning to transform our earnings,” said Chairman Graeme Milne. “Our core strategy is to partner with leaders in the infant formula and adult nutrition industries. These half year results demonstrate the early success of this strategy and we’re pleased with our pace of execution,” said Mr Milne. Nutritional product sales for the period were 7,498 MT, a 155% increase on HY15’s 2,946 MT, and accounted for 16% of total sales volumes in HY16. “The result we’re expecting is an almost fourfold increase in canned infant formula sales in FY16, compared to FY15. Concurrently, by the end of FY16, we will have strengthened our balance sheet by restructuring our working capital requirements and repaying debt.” “This position provides a base for potential further capital expansion,” said Mr Milne. Managing Director and CEO John Penno highlights the success of Synlait’s partnership with nutritional customer The a2 Milk Company™. “As the sole manufacturer of their fast growing a2 Platinum® range of infant formula, it’s a good example of a strong customer relationship providing a positive return to our bottom line,” said Mr Penno. “We continue to work closely with The a2 Milk Company™ to support their growth and expect this partnership will grow deeper over time. At the same time, we are equally committed to developing all of our customer partnerships.” This includes a partnership with US-based Munchkin […]

Old dirt, new boots: the economics of land, water and people

The evolution of New Zealand’s farming systems towards greater sustainability, and one man’s journey to redefine what it means to be an academic, are the topics for an inaugural professorial lecture being held at the University of Waikato this month. At just 40 years old, Professor Graeme Doole is one of New Zealand’s leading environmental economists. He grew up on a sheep and beef farm in the Taihape region of the central North Island, and has spent the past decade researching the environmental problems associated with agricultural activity on both sides of the Tasman. Professor Doole acts as an economic adviser to the Ministry for the Environment, in a position jointly funded by the Ministry and the University’s Waikato Management School. One key aspect of his role is to help central and regional government develop insights into the economic impact of new environmental policies that will significantly improve the water quality of New Zealand’s rivers, lakes and streams. “Society wants better water quality, but at the same time our national economy is heavily reliant on agriculture. Now we’re faced with trying to reverse-engineer our traditional farming systems, and that’s really difficult,” he says. In recent years, Professor Doole says his academic practice has shifted towards “a more pragmatic economics where I can engage with people and help to solve real-world problems. You’re always hoping that your work will transform the world for the better, even in some small way, rather than just living in a book.” The loss of contaminants from farms into waterways remains a huge challenge for New Zealand to overcome. However, Professor Doole believes researchers often spend too long trying to build complex models, rather than looking for simpler solutions that would lead to quick environmental wins. “We need to ask ourselves, right now, what is the […]

Rural contractors back current temporary worker immigration rules

Agricultural contractors around New Zealand support the Government’s current immigration rules on allowing temporary workers into the country. This comes following recent criticism by opposition political parties that these regulations are cutting New Zealanders out of employment. Rural Contractors NZ (RCNZ) president Steve Levet says the use of temporary, skilled overseas workers is vital for agricultural contracting sector. “Every year, in many parts of the country, it’s often impossible for rural contractors to find skilled New Zealanders to carry out this seasonal work,” he explains. “That’s why it is necessary for us to look overseas to find experienced people to fill this need.” It is not known exactly how many temporary, overseas workers are needed by rural contractors each year – but it is thought to be around 900. Mr Levet says RCNZ has worked hard with Immigration New Zealand in an effort to resolve the problems around contractors bringing in overseas workers for the harvest season. Later this year, national body will implement a new scheme to bring in overseas workers – following a deal struck between it and Immigration NZ. This will see RCNZ applying for an Approval in Principle (AIP) on behalf of all members of the national body and contractors. Contractors will then be able to apply online for a visa for the person being recruited – without having to advertise, go to WINZ or any the other requirements currently causing so much difficulty. “As RCNZ will hold the AIP, there are a number of responsibilities placed on us and it will be important that all those contractors who wish to use this scheme comply with all these conditions and requirements,” Mr Levet explains. “For starters, there will need to be a written contract between RCNZ and each member company participating in the scheme – to […]

Agri-food sector crucial for New Zealanders’ wellbeing

The agri-food sector in New Zealand contributes around one fifth of the country’s GDP according to a new study released by the Agribusiness and Economics Research Unit (AERU) at Lincoln University – and there are some key actions to keep that contribution strong. The Land and the Brand report, authored by Professor Caroline Saunders and Professor Paul Dalziel, aimed to measure the sector’s economic impact and to analyse how the sector can (and must) continue to grow to support the wellbeing of New Zealanders. Agri-food produce grown from the country’s natural resources make up more than 70 per cent of New Zealand’s merchandise exports. This includes dairy products, meat and wool products, forestry and wood products, horticulture products and seafood. The study found that in 2011/12, the growing and harvesting of products contributed 6 per cent of GDP, or $12 billion, to the economy. Processing those products doubled the sector’s value to $25 billion or 12 per cent of GDP. “These primary and processing activities themselves then draw on additional goods and services across the whole economy,” explained Professor Saunders. “If you take these indirect effects into account, the total size of the agri-food sector was $40 billion in 2011/12. That’s nearly $1 for every $5 spent in the economy that year.” The Land and the Brand study looked at not just the economic data but also the future of the sector, setting out a vision for future growth. Continued commercial success requires a combination of industry leadership, effective science, skilled people and cooperative investment – all working towards production of high value products from the agri-food sector, rather than treating our agri-food products as low-cost commodity items. “The findings underscore how critical the industry is to our economic health, and the future opportunities for New Zealand as a high […]

Not a good example

Rural Contractors NZ (RCNZ) is concerned about Fonterra’s moves to extend the time it takes to pay contractors as part of an efficiency drive. The organisation, which represents NZ’s agricultural contractors, concerns come in the wake of reports that Fonterra has extended by two months the time it takes to pay suppliers; while also asking them to cut their charges. The dairy co-op has defended the move as about boosting efficiency. RCNZ president Steve Levet says this is not the type of action an industry-leader like Fonterra should be undertaking. “It sends a terrible message to farmers. That it is ok to delay paying suppliers and that is not on,” Mr Levet says. “We all understand the dairy sector is undergoing a very, tough period. But this should not be used as an excuse to not pay contractors in a fair and timely manner.” Mr Levet believes dairy farmers – many who will be making a loss this year – would not approve of such action and he does not want to see them to take a similar stance with their own suppliers. “Dairy farmers – on the whole – are good and fair people, but when Fonterra takes a stance like this – they make think it is ok for them to do the same. “I can tell you rural contractors are hurting just as much as dairy farmers. The last thing we need is for people to delaying paying us or trying to dictate pricing. We all have to live.” Mr Levet has called on dairy farmers to pressure Fonterra to ensure it treat its contractors fairly.

Primary ITO helps keep traditional Kiwi farming know-how on the farm

New Zealand farmers are an ageing demographic and the traditional succession model – of the children inheriting the farm – is breaking down, raising questions around how the generational and experience based knowledge of Kiwi farmers will be passed down. A study by agribusiness scientists, John Fairweather and Stephanie Mulet-Marques, using Statistics New Zealand data shows that farmers (owner operators) are getting older, and fewer farm children are interested in continuing on the family farm. There also appears to be an increase in the corporatisation of local farms, although no studies have been done, which also potentially puts traditional farming knowledge that is learned through the experience of generations, at risk. However, initiatives like the 450 strong Primary ITO volunteer mentor network – as well as training advisers who travel from farm to farm, and retired farmers who remain involved with the likes of Federated Farmers – are helping to make sure that valuable Kiwi farming know-how is preserved, even though farm children are going on to other professions. Primary ITO regional manager in the Manawatu, Cathy Puanaki, says that steps are already in place to ensure ‘succession knowledge and experience’ is handed down, even to the level of a farmer’s learned experience of factors like the micro-climate and soils relevant to his particular farm. “We have training advisers who are active farmers at the moment, whose children aren’t interested in going into farming, so we know it’s happening. I think technology is changing the way things are done, and children in particular are seeing different opportunities that they want to explore. The younger generation are choosing not to carry on the traditional family farm. They are keen to go and attain new qualifications, techniques and technologies and bring them back to the family farm.” Cathy believes though that the […]

How to respond to the ‘water quality versus production debate’?

-by Dr Blair Miller – Group Manager Environmental Research, Lincoln Agritech Government recently issued a call of action to the country, saying that we must work to double our primary production export earnings while maintaining or improving water quality. To most people, this twin challenge will seem contradictory. Yet we are capable of fulfilling both of these duelling ambitions. In fact, the fight to attain them is one that we must fully commit to. I believe we can do it, as we have some of the best scientific minds in the world on the case. But we need to utilise our experts so we have the best chance of balancing economic development with environmental protection. Achieving export growth means developing new markets and these markets will be increasingly judging us on the integrity of our production processes. If we allow environmental impacts to worsen, we risk damaging the reputation on which our primary sector exporters trade. In other words, the Government’s challenge is not contradictory. Positive economic development must be based on sound environmental outcomes. Pundits regularly promote the notion of moving up the value chain to increase export earnings. This, of course, is happening all the time and we should applaud companies like Synlait with their slogan, “Making more from milk”, which describes the strategy very well. However, we must look at how much primary produce we need to achieve growth. Bulk commodities dominate primary sector exports and this will continue for the foreseeable future, so increasing production is the only realistic way to double our primary export earnings. However, this means intensification, and with that comes environmental impact. We need to understand this impact if we are to develop strategies that will tackle it. The fate of nitrates attracts the most attention in this area due to dairy […]

NZ catches up with new health claims standards

By Peter Brown Food and beverage businesses need to make sure the nutrition and health claims on their products stack up, after new standards regulating these claims kicked in recently. The new rules couldn’t be more timely, with New Zealand’s food industry on a high. The health foods and health-giving foods sector is booming here and offshore, but with that comes a responsibility to assure consumers and our export partners of the high standard of New Zealand’s products. All health claims must now be pre-approved and with acceptable nutritional profiles as outlined by Food Safety Australia and New Zealand (FSANZ). You yourself would be able to pinpoint times spent standing in a supermarket aisle reading statements such as ‘calcium for strong bones’ on the side of a bottle. Statements like this previously had poor regulatory framework in New Zealand, and were not necessarily backed by scientific research. For a country that sells itself on reputation and quality, I see it as ironic then that we’ve been lagging behind on initiatives that regulate nutrition and health claims, with Canada and Europe streets ahead. And while there has been a generous, three-year lead up to comply with the new standards, there are still plenty of products that will fall short because their claims don’t comply. It’s tricky, because there is a difference between claims that are clearly just marketing, and those that consumers could take more seriously, with the potential of creating a health risk. For example, someone could take the ‘more must be better’ approach to mānuka honey and rather than sweetening their tea with it, consume a cup of the stuff a day and disturb a balanced diet. To me the new standard seems fair. Going back to calcium, under the new standard it can be said that calcium is necessary […]

NZ’s ultimate rural challenge begins

New Zealand’s ultimate rural challenge, FMG Young Farmer of the Year, takes place at regional locations around the country. Now in its 48th year, the iconic Contest displays the finest of New Zealand Young Farmers in a range of action-packed challenges. In the lead up to the seven Regional Finals in 2016, over 250 Young Farmer hopefuls battled it out across 24 District Finals for a spot in their region’s final. Between February and April 56 contestants will take up the challenge in their Regional Finals around the country, narrowing the field to a single representative from each region to compete at the Grand Final in Timaru from 7-9 July 2016. “The FMG Young Farmer of the Year Contest is unique in the world for its national reach and breadth of competition, a global leader for this genre of competition,” says Terry Copeland, CEO of New Zealand Young Farmers – organisers of the Contest. “It’s a chance for the wider New Zealand community to see first-hand the specialist knowledge and skills that our future rural leaders possess. It is a showcase for the cream of New Zealand’s up and coming agri-sector talent.” Regional Finalists show their skills across a range of tasks in the Practical Day challenges and Evening Show rounds as they vie for a spot in the Grand Final and a slice of the total $303,150 Contest prize pool. The Practical Day, which is open to the public, is fast-paced and physical with sporting and agricultural skills demonstrated alongside business know-how. The Evening Show, in front of a live audience, includes quiz rounds on specialist topics and general knowledge. The FMG Young Farmer of the Year has been supported by many long-standing sponsor partners. In October 2015 NZ Young Farmers announced FMG as the new principal sponsor for […]

Sustainable Foods Summit Europe Agenda Announced

The European edition of the Sustainable Foods Summit will feature sustainable ingredients, and approaches to tackle food losses & waste. Taking place on 9-10th June, the executive summit will be hosted in Amsterdam for the eighth consecutive year. The proceedings will open with a discussion on the implications of COP21. The food industry generates a quarter of all greenhouse gases, with over half coming from livestock production. What can be done to mitigate emissions from dairy and meat production? Taco Kingma from Friesland Campina will look at the solutions provided by sustainable dairy farming. How is the dairy cooperative expanding its business by climate-neutral growth? Alpro, the leading plant-based food company in Europe, will show how it is leading the way in reducing and offsetting carbon emissions. Its Provamel brand has been carbon neutral since 2010. The Marine Stewardship Council will give an update on sustainable seafood and its new seaweed standard. Advances in sustainable ingredients will be featured. The Italian pasta firm Barilla will show it is adding sustainable value to raw materials. Its sustainable durum wheat has led to improvements in product quality, soil fertility, and higher economic output. Using tea as a case study, an update will be given on sustainable sourcing and transparency. The Union for Ethical BioTrade will give details of its new sustainability programme for herbal teas. With most companies focusing on environmental footprints, Tradin Organic will highlight some of the issues when addressing social impacts of ingredients. Other topics include emerging natural sweeteners, formulating for transparency, and novel ingredients from food waste. Summit participants will also discuss the future direction of sustainability labels. Is the way forward with the rising number of third party labelling schemes, or with in-house sustainable sourcing programmes like those introduced by Starbucks, Nestlé and Mondelez Foods? An update […]

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