North eastern NSW’s Norco dairy co-operative is eyeing possible growth options well outside its traditional base in the wake of the big milk shake-up unfolding further south.
While southern Australia’s dairy sector tries to make sense of what the Murray Goulburn (MG) co-operative’s $1.3 billion sell-off to Canada’s Saputo will bring, Norco chairman Greg McNamara, says his 122-year-old co-op is looking at how its regional footprint might expand and to push export initiatives further.
“We certainly weren’t looking at buying into Murray Goulburn, but we don’t rule out any possibility which may emerge as a result of what’s happened in Victoria,” he said.
Coincidentally, Norco’s newly-recruited chief executive officer, Ben White, moved north three weeks ago from southern Victoria’s Gippsland dairy heartland with an agribusiness background spanning dairy beef production and agricultural exports to Asia.
Mr White feels Norco has much more potential as an export player, and not necessarily to China where three years ago it pioneered the sale of fresh milk exports flown direct from Australia.
“To a large extent I think we’ve probably under-delivered on export opportunities and there could be other areas where we can take a refreshed look at what we do,” Mr White said.
“There is so much happening in the dairy industry at present and it is crucial Norco is well placed to take advantage of any opportunities identified in the short, medium or longer term.”
Chairman, Mr McNamara is thinking along the same lines.
“The export market, and more of a national presence, are areas we’d like to direct more attention to,” he said.
Norco, which had sales of almost $560m last financial year, draws milk from 215 suppliers in South East Queensland and the NSW North Coast where it also has milk plants at Lismore, Raleigh, and a at Labrador on the Gold Coast.
It has 29 rural supplies stores spread between Bundaberg in Queensland and the Hunter Valley.
While Mr McNamara was not predicting what would wash up after Saputo’s buyout of nine MG processing assets and many brands, past experience suggested big dairy takeovers were invariably followed by, at least, some asset divestments or rationalisation.
The export market, and more of a national presence, are areas we’d like to direct more attention to.
“If something falls out of the MG portfolio which might be interesting to us, we’ll certainly take a look at the possibilities,” he said.
“We’ll always looking to expand if we can make money out of an opportunity.
“We’re doing quite well as a business – with profits around the $1.5m a year – but we do tend to be a bit far away from a lot of dairy activity in Australia.”
That regional isolation did, however, have some advantages, including being somewhat insulated from “the chaos” which hit many processors and producers in recent years as international milk prices spiked then crashed, leading to last year’s southern farmgate milk price collapse, and the unravelling of farmer loyalty to milk companies, most notably MG.
Norco, meanwhile has enjoyed exceptional brand loyalty from suppliers and consumers, which new CEO, Mr White, said were attributes it could leverage to its advantage if expansion opportunities opened up.
I’m seriously very strong about making the co-operative concept a branding advantage for us.
“The hard work and culture that have built this co-op and generated a brand which really resonates with consumers and are great strengths to build on,” he said
“I’m seriously very strong about making the co-operative concept a branding advantage for us.
“It’s an honour to have the opportunity to lead this iconic co-op through our next stage of profitable and sustainable growth.”
New CEO’s CV
Originally from a family farming background in the NSW’s western Riverina, he has lived in Victoria for the past 15 years, most recently was involved in a milk-fed beef venture raising and marketing Holstein veal for Singaporean, Japanese and domestic high end restaurants.
The venture recently sold to Central Agri Group, which owns the Trafalgar abattoir.
Mr White previously worked at government level with South East Asian companies investing in Australia and sourcing produce ranging from truffles to meat and wine.
“I’ve got a lot of friends and contacts in the dairy industry, and have known quite a bit about Norco for a while,” he said.
“I’m pretty excited about working here.”