Saputo has a three-pronged plan to mitigate the slide in dairy production threatening the efficiencies of its Australian factories.
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This includes a third-party milk and co-packing, a multi-million-dollar pledge to boost the industry and, controversially, plant-based drinks. Saputo Dairy Australia chief executive Lino Saputo admitted the local business had not met targets.
It needed 300 to 400 million litres more milk for 90 per cent capacity utilisation.
"We're still very optimistic through either patron-based milk, co-pack agreements or third-party milk coming to our facilities that we will achieve our 90pc capacity utilizations within the next year-and-a-half or two years," Mr Saputo said.
Mr Saputo said the added cost of sourcing third-party milk was not detrimental.
"Well, it's not substantially more expensive," he said.
"You know, we have to look at it from an economic perspective of how we can mitigate some overhead expenses with more milk coming through our facility."
Last June, Mr Saputo gave the Australian arm just one more financial year to reach that goal but said yesterday he'd decided to extend the deadline.
"Given the circumstances of the dairy industry, with dairy farmers getting out of the business, with the the drought issues, with the bushfire issues, I think we need to remain flexible in that," he said.
Dairy 'not dead'
Mr Saputo said Australia's reputation for quality product was valuable.
"A lot of consumers and a lot of our customers have gained a lot of confidence in the quality of the product that's coming out of Australia," he said.
"And, so, if we want to be a credible international player, we need to have a platform here in Australia.
"Look, I'm telling you that dairy is not dead.
"Dairy is not dead in Australia either."
Plant drink plan
The comments echo those made after announcing Saputo's Canadian factories would produce plant-based dairy alternatives and, yesterday, he confirmed Australia would follow suit in two to five year's time.
"Look, we have the infrastructure, we have the technology, we have the expertise to process efficiently and effectively," Mr Saputo said.
"And if we have excess capacity, why not use that for products that are non dairy?
"I will say this though, we are a dairy-oriented business first and foremost."
Mr Saputo was keen to help rebuild confidence.
"I'm very optimistic about how Saputo could be a leader in this space here supporting dairy farmers all over the country."
