Latest / Best of Business / Tim Carter: Synlait acting Chief Executive on the company moving back into profit

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Tim Carter: Synlait acting Chief Executive on the company moving back into profit · Best of Business

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  Speaker 1: You're listening to a podcast from news Talk zed Be
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  Speaker 2: Though it is the story of Sinlay, the dairy company
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  Speaker 2: has shaken off its troubles from twenty twenty four and
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  Speaker 2: returned to profitability four point eight million dollars. That is
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  Speaker 2: the profit it's posted for the first half of the year.
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  Speaker 2: That compares pretty favorably with the ninety six point two
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  Speaker 2: million dollar loss the company posted last year. Tim Carter
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  Speaker 2: is the acting CEO. He's with me now, High Tim, Hey, Ran,
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  Speaker 2: how are you good? Thank you? So it's been a
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  Speaker 2: very troubling time for you guys. This must be a
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  Speaker 2: welcome result, albeit a modest one.
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  Speaker 3: Yeah. Look, today is as really as a positive news
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  Speaker 3: day for Sinley. We've announced the return to profitability in
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  Speaker 3: the first half as as you've mentioned, and given the
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  Speaker 3: position Sinley was in twelve months ago, this really is
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  Speaker 3: a considerable commercial achievement and something are we're really proud of.
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  Speaker 2: How did you do it?
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  Speaker 3: Look a heic of a hard lot of work's gone
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  Speaker 3: in but probably four key areas of focus. Our advanced
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  Speaker 3: nutrition demand has been really strong, which is really pleasing.
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  Speaker 3: That's really helped, I think our North Onland asset, which
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  Speaker 3: has been a real drag on the p and l
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  Speaker 3: over the years, we've we've started to optimize that and
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  Speaker 3: although there's a long way to go, that's certainly certainly
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  Speaker 3: reduced the losses. So that's certainly helped, you know, training
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  Speaker 3: conditions across commodities globally. The lead bucket that we talked about,
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  Speaker 3: the skim and fat lead bucket that's there along with
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  Speaker 3: FXS has been the other driver. And the fourth one
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  Speaker 3: is just prudent cost management. You know, we're really focused
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  Speaker 3: on that era in our business and making sure that
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  Speaker 3: they were optimizing spend and optimizing our operation.
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  Speaker 2: In particular, you mentioned the North Island asset drag. I'm
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  Speaker 2: assuming you're referring to Pocono what's happening with it.
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  Speaker 3: So look, you know, the big fix there, Ryan is
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  Speaker 3: all about volume and new customers, and so what we're
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  Speaker 3: going to have to do is really target that plant
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  Speaker 3: for advanced nutrition. And what that's meant is we've no
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  Speaker 3: longer taken a raw milk into that facility. By doing that,
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  Speaker 3: it's allowed us to reset our cost space and right
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  Speaker 3: size that. What we've also done is through new customers.
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  Speaker 3: We've got a little bit more volume through that plant,
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  Speaker 3: and so that's certainly helping us. As I said, the
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  Speaker 3: real silver bottlers get more volume through that plant, the
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  Speaker 3: efficiencies will come and then we ideally we want to
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  Speaker 3: get that into a positive contributing factory.
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  Speaker 2: Yeah, does it make sense to have it as a
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  Speaker 2: non milk product factory.
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  Speaker 3: Yeah? Absolutely, you know right now that is the right
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  Speaker 3: option for us. As I said, it stops the decline
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  Speaker 3: or stops the losses or reduces them. So that is
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  Speaker 3: the right decision. And look, we look at our customer
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  Speaker 3: base or our new business development in particular, we bring
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  Speaker 3: that in and through a funnel. And look, we have
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  Speaker 3: some really good customers that we're qualifying right now that
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  Speaker 3: I think in twenty twenty six if we can realize
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  Speaker 3: them and that demand, some of that volume will go
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  Speaker 3: through there, So that it absolutely makes sense.
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  Speaker 2: For now you've said and you said it reduces the losses,
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  Speaker 2: not stops the losses. So, presuming it's still loss making,
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  Speaker 2: is it for sale?
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  Speaker 3: Would you sell look like anything? Right now we're not
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  Speaker 3: actively selling it, but sure if a credible offer came in,
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  Speaker 3: would certainly recommend the board considerate, but you know that's
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  Speaker 3: more of a hope strategy right now. As management, our
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  Speaker 3: job is to increase the demand, optimize the cost base
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  Speaker 3: and get it back to profit.
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  Speaker 2: Fair enough, Now let's talk about the suppliers. How many
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  Speaker 2: suppliers are still wanting to get out.
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  Speaker 3: Yeah, So I think what's interesting there on our farmer
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  Speaker 3: progress is, you know, go back six months ago, we
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  Speaker 3: probably had a milk crisis. Right now we're in a
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  Speaker 3: really good position when we look at the twenty sixth season.
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  Speaker 3: You know, we have ample milk next year coming our
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  Speaker 3: way when we go to twenty seven and we can
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  Speaker 3: now say that we have a majority of our milk
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  Speaker 3: in the South Island no longer undersease, which is really promising.
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  Speaker 3: And we also have a lot of interest from new
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  Speaker 3: milk down here in the South Island, whether that's coming
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  Speaker 3: from existing farms with different processes or interesting enough conversions.
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  Speaker 3: There seems to be a few conversions in the pipeline
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  Speaker 3: down here as well, and that really interested in our
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  Speaker 3: in our offer and what's something they can do for them. So,
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  Speaker 3: you know, we're really confident we have momentum. What's really
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  Speaker 3: important for those farmers that that have that are still
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  Speaker 3: under ceased was today's announcement. You know, the feedback has
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  Speaker 3: been that, you know, we just want to know that
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  Speaker 3: that get you're doing well, You're back on track and
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  Speaker 3: is the future. So you know this announcement today will
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  Speaker 3: certainly help. That will help give those farmers confidence. And
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  Speaker 3: we're looking forward to the next week and seeing those
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  Speaker 3: cease ceases being pulled over over that period.
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  Speaker 2: Do you is that's what you're hoping will happen. Have
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  Speaker 2: you had any indication yet since announcing today's result that
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  Speaker 2: that will happen?
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  Speaker 3: Yeah? Absolutely, And you know every every hour, every day, Ryan,
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  Speaker 3: that number changes in terms of what's coming in. So
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  Speaker 3: we are very confident in terms of those ceases. And
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  Speaker 3: remember we a majority right now that is not under cease.
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  Speaker 3: It's about closing out the rest. Okay.
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  Speaker 2: And what about Donald Trump? Do you lie wake at
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  Speaker 2: night worrying about him and his agricultural tariffs?
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  Speaker 3: Yeah? Absolutely, I think you know, there's so much unkderw
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  Speaker 3: on there, Ryan, But is you know what is going
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  Speaker 3: to happen around taris what does that mean globally? And
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  Speaker 3: then what does that mean for supply and demand? You know,
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  Speaker 3: everything from Tariffman in us, probably even through the foot
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  Speaker 3: and mouth out of Europe, and what does that mean
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  Speaker 3: and if that spreads further, what can that do to
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  Speaker 3: milk flows in Europe? And then ultimately what does that
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  Speaker 3: do for supply globally? So those are all I think
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  Speaker 3: any milk process in New Zealand right now I was
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  Speaker 3: watching that. I think we're well placed to navigate that,
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  Speaker 3: but it is obviously an ongoing concern coming.
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  Speaker 2: You know, this is first half, obviously second half looking
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  Speaker 2: not well. Things aren't looking great for the full year.
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  Speaker 2: Would it be fair to say no, No, I.
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  Speaker 3: Don't think that's fair to say. I think what we're
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  Speaker 3: what we're trying to say here Ryan is look, the
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  Speaker 3: second half won't be quite as strong as the first half,
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  Speaker 3: but overall the EBITDA performance for the full year will
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  Speaker 3: be a significant improvement year on year, and I think
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  Speaker 3: that's really important. You know, we do have some headwinds,
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  Speaker 3: so talk about the mickstream returns that swapped from a
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  Speaker 3: skimm and fat lead bucket through to a whole book
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  Speaker 3: lead bucket, and so that just presents a few headed winds.
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  Speaker 3: But the key messages is the end of year is
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  Speaker 3: still looking really, really promising. It just won't be as
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  Speaker 3: strong as the first half, all right.
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  Speaker 2: Tim, Nice wrapping with you there. Tim Carter acting sin
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  Speaker 2: Leys CEO, with us returning to profit.
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