August 17, 2025 • 5 mins
The a2 Milk Company has inked a long-awaited deal to purchase Yashili’s New Zealand plant for $282 million and sold its stake in Mataura Valley Milk to Open Country Dairy. We ask the chief executive of OCD if he got a bargain basement buy?
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Episode Transcript
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Speaker 1 (00:00):
Musical chairs in the dairy industry. This morning, the press
releases were flying thick and fast. The A two Milk
Company has inked a long away to deal to purchase
Yashili's new Zealand plant for two hundred and eighty two
million and it's sold at steak in Matara Valley Milk
to Open Country Dairy. Now Matara Valley Milk has a
(00:20):
big flash new plant just outside a gore. Let's welcome
on to the country, the chief executive of OCD Open
Country Dairy, Mark Delator. This is a bargain for you,
Mark Ato. Well, yeah, good afternoon. A two is going
to have a write down or suffer a loss of
one hundred and thirty million on this deal. You stole
(00:42):
it from under their nose.
Speaker 2 (00:44):
Oh. I don't know if that's quite the deal. I
like the way you talk, but no, look, we valued
the business, you know, in terms of what we thought
we could capture from it, Jomie, and for us, it
was really about an investment that just secures our position
in that Southland South Otaga region. So it's an exciting
day fighting country.
Speaker 1 (01:02):
So you'll be chasing new supplies at the bottom of
the country.
Speaker 2 (01:05):
Yeah, absolutely. You know, we've been, you know, looking to
secure more milk milk in that region anyway, and I
think just you know, being that little bit further north
up towards Gore just gives us logistically a little bit
of crete in terms of the area where we can
secure milk from. So you know, you know the drill, Jamie.
(01:26):
We see our role in the industry is providing farmers
with choice and giving them an alternative. And you know,
hopefully for a new group of farmers, we can give
them that opportunity.
Speaker 1 (01:35):
Do all the existing suppliers to Matara Valley Milk come
with the deal? Come with the package?
Speaker 2 (01:41):
Yeah, they do, Jamie. I mean, we bought the shares
in the Matara Valley Company, so it comes with all
of the contractual deals that they'd go with their company.
So we'll be honoring the milk supply agreements, of course,
and we'll be getting around to look, you visit with
all the Matara Valley farmers in the next week or two.
Speaker 1 (02:01):
Why would a two sell it for what one hundred
million dollars and have a loss of one hundred and
thirty million on the deal? Why not keep it? What's
in it for them?
Speaker 2 (02:10):
You've always to ask them that, Jamie. I mean that
for them, it's obviously part of a big supply chain reorganization.
They'll have their reasons for doing it. Just it was
a great opportunity for Open Country to establish further our
position in Southland.
Speaker 1 (02:28):
So A two has purchased Yashirl's New Zealand plant for
two hundred and eighty two million dollars. Is that Pocono?
It's so confusing.
Speaker 2 (02:36):
Yeah, there's two sites in Pocono. As you drive past it,
there's the sin Late site in Togona. Right next door
is the Yeshili site. So they've bought the y Chili site,
which is the northern site as you're driving, say from
Hamilton to Auckland.
Speaker 1 (02:52):
So once again this is confusing. What happens to all
those North Island Sinley suppliers who have been supplying their
milk to Open Country Dairy.
Speaker 2 (03:00):
Well that continues, Jo. You know, there's all the farmers
have got their own contracts that they're working through, but
with Snate now and and you know we'll be looking
to try and continue to collect that milk ongoing and
you know, keep the relationships going in that front. So
you know that's quite separate to the steel down the
Natara Valley really, so that's it's probably a North North
(03:24):
Island versus south Old story.
Speaker 1 (03:26):
That plant just outside of Gore and you've paid what
one hundred is it one hundred million dollars or is
that commercially sensitive?
Speaker 2 (03:33):
That's commercially sensitive right.
Speaker 1 (03:35):
Somewhere around there. Okay, But you couldn't build it for.
Speaker 2 (03:38):
That Yeah, probably not in today's you know, and you
know with today's building costs, I guess, but the you know,
in terms of what you know, how that valuation is
done and what's included, Jamie will Well, we'll just move
forward and say we're proud to get the get the
business and we'll be looking to run it hard and
(04:01):
see what we can do in that south In region.
Speaker 1 (04:03):
So in percentage terms, how much does the purchase of
Matara Valley milk increase the total open country dairy stable buy?
Is it ten or twenty percent?
Speaker 2 (04:15):
Yeah, i'd be in terms of it, I'd look maybe
another four or five percent, you know, in terms of
our size, I think from a national milk pool point
of view, might give us another percent Jamie. But you know,
for us, like I said, I'm sort of repeating myself,
I know, but for us, it was more about buying
a fantastic facility and it gives us the chance to
(04:38):
produce a range of products that we don't currently offer
to our markets and grow it and sign on more
milk in that part of the country.
Speaker 1 (04:46):
Yeah, it sounds like a good deal. Just while I've
got you, prospects for twenty five twenty six are looking
pretty good. Is that ten dollars locked and loaded?
Speaker 2 (04:57):
Yeah, I mean it is looking good at the moment,
isn't it. Pricing holds and you know, it was interesting.
We were just looking because we pay four periods. Of course,
we're looking at, you know, once we once we settle
P one this year, what the returns for open country
farmers would be over the past four periods in a
period two, three and four of last year, in period one,
it will be looked pretty pretty eye wateringly good, to
(05:20):
be honest. Any but the you know, lots of volatility
in the world. I keep saying, you know, there's lots
of changes, as you well know. But it's certainly looking
good at the month.
Speaker 1 (05:29):
We'll take it while it's on ofthor Mark delatour chief
executive Open country I still reckon. You've got your butt
yourself a bargain just outside of Gore. Good luck, Thanks
Jerny
Musical chairs in the dairy industry. This morning, the press
releases were flying thick and fast. The A two Milk
Company has inked a long away to deal to purchase
Yashili's new Zealand plant for two hundred and eighty two
million and it's sold at steak in Matara Valley Milk
to Open Country Dairy. Now Matara Valley Milk has a
(00:20):
big flash new plant just outside a gore. Let's welcome
on to the country, the chief executive of OCD Open
Country Dairy, Mark Delator. This is a bargain for you,
Mark Ato. Well, yeah, good afternoon. A two is going
to have a write down or suffer a loss of
one hundred and thirty million on this deal. You stole
(00:42):
it from under their nose.
Speaker 2 (00:44):
Oh. I don't know if that's quite the deal. I
like the way you talk, but no, look, we valued
the business, you know, in terms of what we thought
we could capture from it, Jomie, and for us, it
was really about an investment that just secures our position
in that Southland South Otaga region. So it's an exciting
day fighting country.
Speaker 1 (01:02):
So you'll be chasing new supplies at the bottom of
the country.
Speaker 2 (01:05):
Yeah, absolutely. You know, we've been, you know, looking to
secure more milk milk in that region anyway, and I
think just you know, being that little bit further north
up towards Gore just gives us logistically a little bit
of crete in terms of the area where we can
secure milk from. So you know, you know the drill, Jamie.
(01:26):
We see our role in the industry is providing farmers
with choice and giving them an alternative. And you know,
hopefully for a new group of farmers, we can give
them that opportunity.
Speaker 1 (01:35):
Do all the existing suppliers to Matara Valley Milk come
with the deal? Come with the package?
Speaker 2 (01:41):
Yeah, they do, Jamie. I mean, we bought the shares
in the Matara Valley Company, so it comes with all
of the contractual deals that they'd go with their company.
So we'll be honoring the milk supply agreements, of course,
and we'll be getting around to look, you visit with
all the Matara Valley farmers in the next week or two.
Speaker 1 (02:01):
Why would a two sell it for what one hundred
million dollars and have a loss of one hundred and
thirty million on the deal? Why not keep it? What's
in it for them?
Speaker 2 (02:10):
You've always to ask them that, Jamie. I mean that
for them, it's obviously part of a big supply chain reorganization.
They'll have their reasons for doing it. Just it was
a great opportunity for Open Country to establish further our
position in Southland.
Speaker 1 (02:28):
So A two has purchased Yashirl's New Zealand plant for
two hundred and eighty two million dollars. Is that Pocono?
It's so confusing.
Speaker 2 (02:36):
Yeah, there's two sites in Pocono. As you drive past it,
there's the sin Late site in Togona. Right next door
is the Yeshili site. So they've bought the y Chili site,
which is the northern site as you're driving, say from
Hamilton to Auckland.
Speaker 1 (02:52):
So once again this is confusing. What happens to all
those North Island Sinley suppliers who have been supplying their
milk to Open Country Dairy.
Speaker 2 (03:00):
Well that continues, Jo. You know, there's all the farmers
have got their own contracts that they're working through, but
with Snate now and and you know we'll be looking
to try and continue to collect that milk ongoing and
you know, keep the relationships going in that front. So
you know that's quite separate to the steel down the
Natara Valley really, so that's it's probably a North North
(03:24):
Island versus south Old story.
Speaker 1 (03:26):
That plant just outside of Gore and you've paid what
one hundred is it one hundred million dollars or is
that commercially sensitive?
Speaker 2 (03:33):
That's commercially sensitive right.
Speaker 1 (03:35):
Somewhere around there. Okay, But you couldn't build it for.
Speaker 2 (03:38):
That Yeah, probably not in today's you know, and you
know with today's building costs, I guess, but the you know,
in terms of what you know, how that valuation is
done and what's included, Jamie will Well, we'll just move
forward and say we're proud to get the get the
business and we'll be looking to run it hard and
(04:01):
see what we can do in that south In region.
Speaker 1 (04:03):
So in percentage terms, how much does the purchase of
Matara Valley milk increase the total open country dairy stable buy?
Is it ten or twenty percent?
Speaker 2 (04:15):
Yeah, i'd be in terms of it, I'd look maybe
another four or five percent, you know, in terms of
our size, I think from a national milk pool point
of view, might give us another percent Jamie. But you know,
for us, like I said, I'm sort of repeating myself,
I know, but for us, it was more about buying
a fantastic facility and it gives us the chance to
(04:38):
produce a range of products that we don't currently offer
to our markets and grow it and sign on more
milk in that part of the country.
Speaker 1 (04:46):
Yeah, it sounds like a good deal. Just while I've
got you, prospects for twenty five twenty six are looking
pretty good. Is that ten dollars locked and loaded?
Speaker 2 (04:57):
Yeah, I mean it is looking good at the moment,
isn't it. Pricing holds and you know, it was interesting.
We were just looking because we pay four periods. Of course,
we're looking at, you know, once we once we settle
P one this year, what the returns for open country
farmers would be over the past four periods in a
period two, three and four of last year, in period one,
it will be looked pretty pretty eye wateringly good, to
(05:20):
be honest. Any but the you know, lots of volatility
in the world. I keep saying, you know, there's lots
of changes, as you well know. But it's certainly looking
good at the month.
Speaker 1 (05:29):
We'll take it while it's on ofthor Mark delatour chief
executive Open country I still reckon. You've got your butt
yourself a bargain just outside of Gore. Good luck, Thanks
Jerny
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