yes thats what we learnt from Fonterra. So I guess its the same.
They are in a procurement market, so have to pay relative to the competition. In their patch they have Fonterra, Westland and Oceania - but supply relations are a bit sticky in that you need a truck up your driveway every day to collect milk and for a coop you need to have a significant amount invested in shares. Bit different to livestock where farmers often play the field, especially with excess capacity most of the year. I would expect many Synlait suppliers would own at least a few shares.
Westland have been really struggling. Fonterra, well they are Fonterra - enough said. So why pay over the odds?
Generally has been growing supply/volumes, so they just have to position themselves relative to the competition, for a volume/supply of what they need. Just need to be competitive.....
Yes it is. As others have pointed out all they need to do is be competitive and pay a bit more than Fonterror.
They've done amazingly well over the last 10 years and unlike ATM with Geoff Babbage resigning at least John Penno is staying on as a Director so they still have access to his quite considerable abilities. Then there's the lack of Herdlicker giving shareholders a good licking every so often so I prefer this over ATM.
Holding for 5 years is very much "on trend" at the moment so one wonders how this will grow over the next 5 years ?
Last edited by Beagle; 28-01-2019 at 10:44 AM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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Originally Posted by winner69
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