To date, the philosophy of this company seems to be along the lines of "build it and they will come"
Well, there has been a huge amount of building over the past 4 years, but still no big fish appear to have been landed.
Where are the big infant formula players like Wyeth, Mead Jonhson, Abbott, Nutricia? One would expect a pretty good deal could be struck for a major chunk of plant capacity. So why are they not showing interest and jumping on board?
The cost of funding all that new capacity and processing equipment must put SML at a significant disadvantage to Fonterra and Westland Milk when it comes to matching farmer milk payment price. SML absolutely must do this to secure their milk supply since they are not a supplier owned co-operative. Catch 22
I wonder if their balance sheet was previously held up by extremely favourable commodity prices, which have now disappeared and don't sound like they will return in the short term. Is the perfect storm brewing here?