MG boss visits GV on road trip

By Country News on March 14, 2017

Murray Goulburn is surveying its suppliers as part of a review of its milk payment system.
The survey is expected to start this month, new chief executive Ari Mervis told suppliers on a road trip across the southern states including 24 meetings.

The company is conducting 300 telephone surveys and is offering all suppliers the opportunity to be involved.

Mr Mervis said the goal was to send the right market signals to suppliers, in a timely manner, while also balancing farmers’ business management needs.

Murray Goulburn last reviewed its payment system about four years ago.

The review is just one of a number of reviews being implemented by the co-operative following last year’s disastrous milk price cut.

The company is also conducting a review of factory assets, prompting fears that a factory in Victoria may close.

Speculation has been rife that Rochester is under examination, but Mr Mervis told Country News no decisions have been made and any talk about closures was just speculation.
The company is believed to be having a close look at milk volumes going through the factories (it has 10 spread around the country), particularly as it has lost about 20 per cent of its supply since last year’s price cut.

In cost-cutting moves, the company has cut about 200 positions, largely from its head office, which it estimates will shave about  $50million off its annual costs.

Mr Mervis met with bankers, local government representatives and rural leaders in Shepparton last week as part of the road trip, to reassure them the company had a sound financial future and had a plan to win back supplier confidence.

Mr Mervis said the board was looking at its own structure and was considering moving towards a composition of five or six supplier directors and three special directors.

‘‘This ensures majority farmer representation will be maintained and, if endorsed, will require a vote for constitutional change,’’ he said.

The new structure could require a review of the regional representation.

By Country News on March 14, 2017

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