-
Fonterra - Source: ONE News -
Related
Organic farmers left stranded by the financial collapse of Taranaki-based Organic Dairy Ltd have been offered a lifeline by Fonterra.
"Suppliers will now have the option to supply Fonterra on either a shared-up basis or to take a growth contract," Federated Farmers dairy chairman Lachlan McKenzie says.
McKenzie says these suppliers would receive Fonterra's premium payments for organic milk as long as they met its criteria.
The move would enlarge Fonterra's organic milk base, and McKenzie says it was in the best interests of the industry by ensuring no milk was dumped and that the 27 former Organic Dairy Ltd suppliers remained economically viable.
"This is one cooperative riding to the rescue of another that has failed to reach a commercially viable critical mass," he says.
Owned by the New Zealand Organic Dairy Farmers Co-operative, Organic Dairy has gone into receivership owing an estimated $15 million, with the loss of about 30 jobs.
Receivers were appointed on Friday and the Okato factory stopped operating on Saturday, the Taranaki Daily News reports.
The directors asked their major creditor, the Bank of New Zealand, to appoint receivers.
Receivers Andrew McKay and John Cregten, of Corporate Finance in Auckland, declined to put a figure on the debt reportedly estimated to be at least $15 million.
McKay said he was still going through the company records "to find out what we've got and where we go from here".
It would take less than a week to work out whether the business was saleable or could continue trading in some form.
