Westland Milk Products over on the West Coast has posted a second consecutive year of revenues topping $1 billion. Net profit in 2023 reached a record $56 million, topping the previous year's record of $39 million.
CEO Richard Wyeth shares the narrative of Westland's shift from a phase of substantial losses to achieving record-breaking profits and consecutive years of billion-dollar revenues.
He attributes this resurgence in Westland's fortunes to strategic decisions and the company's ability to adapt and execute its plans effectively.
A key talking point in the conversation is the strategic focus on specific product lines, with Wyeth saying, "We've chosen butter and protein as our streams and they've certainly been delivering for us over the last few years."
The CEO details the company's successful investment in expanding its butter plant in 2021, despite the challenges posed by COVID-19, which has paid off, particularly in the United States market. Westland's grass-fed West Gold butter has been well-received in the US, resonating with consumers at outlets like Costco.
"They really love our West Gold butter over there," Wyeth says.
He also emphasises the importance of making difficult but necessary decisions to drive the company's recovery. Wyeth recounts the period between 2019 and 2021 when the company faced cumulative losses of $200 million. To counter this, the company ceased making infant formula, shut down an old dryer, and removed excess costs.
Wyeth describes the situation as a "burning platform" that necessitated clear and rapid change, saying, "You know, we stopped making infant formula on the coast...we became really focused on what we had to do."
Another significant aspect of the discussion involves the challenges faced by farmers, with Wyeth acknowledging the inflationary pressures on the agricultural sector. Despite an $8 payout, some farmers are still struggling, which he finds concerning. However, he reassures that Westland is committed to providing a competitive milk price, stating, "We guarantee to pay the Fonterra milk price plus $0.10, and that will continue."
The conversation paints a picture of Westland's journey to profitability, highlighting Richard Wyeth's strategic leadership and the company's ability to capitalize on market opportunities, make tough choices, and remain committed to its suppliers' well-being amidst industry-wide challenges.
Listen to the full chat between Richard Wyeth and Dominic George above.
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