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Westland Milk says job cuts on the cards

NZN 1/02/2017 Paul McBeth

Westland Milk Products plans to lay off staff as the country's second-biggest dairy cooperative strips out costs that haven't been recouped by the recent recovery in global dairy prices.

The Hokitika-based milk processor won't say how deeply it will cut staff numbers or which units are affected until a review is completed and workers informed by the end of February.

Westland's salary bill rose to $55.4 million in the 2016 financial year from $50.6 million a year earlier, with the number of staff earning more than $100,000 rising to 108 from 85.

Westland currently employs 550 people, with another 107 at EasiYo and 17 at Westland Shanghai.

"Current payout predictions, while higher than for the last two seasons, are still not where our shareholders need them to be and, for some, will still not be sustainable," chief executive Toni Brendish said.

"Our current structure, including staff roles, is not set up in the best way to deliver the results we want to achieve."

In late 2015, Westland signalled it would need to lay off staff to deal with the slump in dairy prices.

Westland farmer shareholders received an average payout of $3.88 per kilogram of milk solids in the 2016 year, which chairman Matt O'Regan said was due to the company's high cost structure to support the value-added strategy it operates. The milk processor is forecasting a payout of $5.30-to-$5.70/kgMS for the 2017 year.

Several hours before the release, director Sven Koops resigned from the board "for personal reasons".

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