By PHILIPPA STEVENSON agricultural editor
New Zealand Dairy Foods is confident last year's dismal profit will be no barrier to spectacular growth.
Chairman John Storey said yesterday that the domestic dairy products marketer's ambition was to become a $2 billion Australasian company.
"We are less than a $500 million company now, so we
have a long way to go, but the goal is achievable," he told the company's annual meeting in Hamilton.
Dairy Foods' profit plummeted from $11 million in 1999-2000 to just under $900,000 in the year to May, mostly due to a 37 per cent rise in the price it paid for raw milk.
The company, half-owned by New Zealand Dairy Group, will be divested under the merger agreement with Kiwi Dairies which will form the Global Dairy Co. The other half is owned by about 6500 farmer non-voting B shareholders.
Mr Storey said among options for the company, Dairy Group could publicly offer its shareholding and list the company on the Stock Exchange. He likened its prospects to Irish company Kerry Gold, which went from a small farmer co-operative to a successful public company worth $5 billion.
Listing could be a valuable option for the firm and farmer shareholders because it would quickly establish market value for shares and allow the firm to access the greater level of capital needed to grow, he said.
Other options were one purchaser buying Dairy Group's shares, or the company outright, or that the farmer shareholders could gain the A shareholding.
He said a farmer ownership move, under the banner of the Great Milk Company, had already enhanced Dairy Foods' value.
