Saputo chief executive Lino Saputo said last week the company needed to lift milk intake from its current level of 1.9 billion litres to 2.5 billion litres within three years to boost capacity of MG’s seven factories to keep them open.
Mr Saputo would not give iron-clad guarantees on whether all seven factories would remain open. “Our intention is to keep those plants open,” he told The Ag Show.
“Markets change, and dynamics change and so I am not going to paint myself into a corner and give any guarantee that I can’t honour. But based on the knowledge we have, our intention is those seven plants will stay open.”
United Dairyfarmers of Victoria president Adam Jenkins said lifting dairy farmer profitability and productivity was the key to securing the extra milk.
Mr Jenkins said trying to secure milk from other companies to keep factories open was not in the long-term interests of the dairy industry.
“We would like to see organic, profitable growth (in milk production),” he said. “But at the same time we understand there will be a little bit of competition, which is healthy.
“If we keep just stealing each other’s milk and going round and round the roundabout, I don’t think that it is in the best interests of the long-term sustainability of the dairy industry.
“It leads to under-investment in some of the factories if they are not knowing how much milk they are going to have next year. There needs to be a higher level strategy.”
A vote of MG suppliers on the Saputo deal was likely at the end of March or by early April.
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