15 Sep 2015

Redundancies at Westland Milk Products likely

9:18 am on 15 September 2015

Westland Milk Products is reviewing staff roles throughout the company which it says is likely to result in some redundancies.

The milk cooperative has about 400 farmer suppliers in Canterbury and West Coast and a turnover of $830 million.

It employs more than 500 people, producing a range of products including infant formula, yoghurt and butter.

Chief executive Rod Quin would not speculate on how many or what jobs might be affected until the review is complete and staff are consulted.

The review is scheduled to occur over two rounds; the round this month and the second in February 2016.

Mr Quin said Westland was also continuing its programme of efficiency gains and a cost saving drive.

Some $15 million was trimmed off the company's budget in the past financial year, but Mr Quin said there would be no let up, and the "microscope" would be on all costs as Westland responded to the volatile international dairy market.

He said the international marketplace for dairy was in a new world era with the removal of the European Union milk quotas and softer demand from key markets.

The resulting reduction in prices was flowing directly into lower shareholder payouts, which were forecast to be below the cost of owning and operating a dairy farm in New Zealand.

Mr Quin said a reduction in costs was required to realign the company's finances with the new reality of lower international prices and what is now a much more competitive New Zealand dairy industry.

West Coast dairy farmer Katie Milne said said Westland Milk warned at its annual meeting last year there were tough times ahead. Ms Milne, a supplier to and shareholder of the company, said news of possible job cuts would further hit the region.