05 Jun 2017

Investing In The Supply Chain

Our commitment announced on Friday to pay a pre July 30 payment of $0.40/kg MS is intended as a cash injection into our supply chain that will repair cash flow and provide working capital for growth, after a punishing year of low prices followed by the poor seasonal conditions of 2015/6.

In total it is a $10m commitment to our Supply Partners which is an investment in building a sustainable supply chain. In practice it means that a 2m ltr/150,000 kg Supply Partner will have available within 55 days $60,000 to advantage their enterprise. Buying fodder, reducing debt or improving efficiencies matters not - we want Burra Supply Partners to recover as quickly as possible from the tough times of FY15 and FY16 and build a better business.

In the middle of two weeks 'in market' and with one week down, I am delighted with the commitment and trust we have in key relationships that ends with the milk we process being consumed on a daily basis in our key markets. I don't know how much more growth the coffee shop segment has got in it in Asia, but let's celebrate that they can't open without a reliable supply of coffee beans and quality milk and each generation seem to be drinking more milk than their mothers, fathers or older siblings. That some shops use UHT milk and know that their customers will soon demand fresh product is all good for Burra Foods.