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Bega confident of growth after difficult year

Rural News

Bega Cheese is confident it’s in a strong position to grow, despite current challenges facing the dairy industry.

The processor saw net profit fall by 59 percent in 2019, in what it’s describing as one of the most difficult years the sector has had to endure.

Chief Executive Paul van Heerwaarden told Macquarie’s Rural Reporter Eddie Summerfield, drought teamed with high input costs for farmers, made it an incredibly tough year.

“We were significantly impacted particularly in the second half of the year, with the reduction of milk in Northern Victoria, across all suppliers in Northern Victoria, a 30 percent decline, and that happened very quickly, and it wasn’t expected,” Mr van Heerwaarden said.

The profit decrease was also impacted by costs associated with the acquisition of Murray Goulburn’s Koroit facility in Victoria’s South West.

But it was that same facility that helped Bega increase it’s overall milk supply by 308 million litres, to 1.06 billion billion.

“If we had not had Koroit we would have had much more limited opportunities to deal with that significant and immediate decrease in milk.”

Revenue for the financial year was up by 13 percent to a record $1.42 billion, largely driven by it’s acquisition of the ownership of Vegemite and several other products from Mondelez International.

“This was all around expanding our business outside pure dairy into a broader basket of dairy and non-dairy products, particularly in branded and consumer food service market,” Mr van Heerwaarden said.

Listen to the full interview above.

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