The Country 01/09/25: Mark de Lautour talks to Jamie Mackay

The chief executive of Open Country Dairy announces it has finalised a deal to acquire 100% of Miraka Limited (Miraka). He says the opportunity to purchase Miraka happened quickly and made sense for the business.

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Episode Transcript

Speaker 1 (00:00):
This was big news this morning. Open Country Dairy is
really on the acquisition trail at the moment. Moves a
plenty in the dairy industry. Open Country has just announced
its finalized a deal to acquire one hundred percent of
me Ruka in the Central North Island Mauri owned dairy
processing company. Mark de Latour is the chief executive. What's next?

(00:23):
You can have a crack at Fonterra.

Speaker 2 (00:26):
Good afternoon, Jamie. No, that might be a leap too
far for sure, but we're really excited. I mean, it's
it's obviously come hot on the heels of our announcement
around purchasing Matara Velly Milk a couple of weeks back,
but it wasn't doesn't feel that way to us because
you know, Matara Valley pretty much took us the better

(00:49):
part of nine or ten months to put together and
this one's happened quite quickly, actually, Jeremy. So you know,
we've looked at meat Aka for quite a while and
thought what a great spot, great location it's in and
but in the opportunity came, we couldn't not look at it.

Speaker 1 (01:08):
You've got plants and other Waikato Wanganui Manawatu obviously down
on Southland. This fills in the middle of the North
Island really nicely. You're missing a plant and I don't know, Mark,
let's just say in a little place like Dunsandal, I'm
flying a kite here.

Speaker 2 (01:28):
I'm pleading the fifth on that one. Jamie. No, but
you're right on the North Island. I mean, they'd take
it back to what we're talking about. I think you're right.
I mean, if you look at that area between our
Wanganui site, which is a major site for us, and
our two plants in the Waikato the mead Archer site
which is located in Morcai near Tapo, I mean from

(01:51):
I don't want to use the word strategy really, but
strategically it does make a lot of sense. Lots of
efficiency around milk collection and anything of the milk curve
at the lower end of the season when we can
still you gain a bit more efficiency through that whole
milk curve with our processing site. So, like I said,
we we've we've looked at it for a little while

(02:12):
and said, gosh, that would be that would be a
great location to have and and and you know, when
the opportunity came along would be silly not to look
at it.

Speaker 1 (02:21):
Well, this has all happened rather quickly, like basically in
the past couple of weeks. Were there other suitors. Did
Fonterra have a crack for instance?

Speaker 2 (02:29):
Oh? Actually, I'm not too sure about the details of that, Jamie.
I mean, I mean, we know we were talking to
the board of Meat Ocre and and you're right, it
did happen reasonably quickly. Not sure what the sale process
was from their end in total, but I mean in
this instance we were the you know, one of our

(02:50):
strengths z is we can move quickly, and I guess
that was a that was a factor in their decision making.
So you were just happy to have secured the deal.

Speaker 1 (02:59):
So the brothers sign off on it and deal's done.

Speaker 2 (03:04):
Yeah the cousins really, I guess, Okay, But that's right.
So so that that's that's that's a good opportunity for us.

Speaker 1 (03:12):
Begs the question why is me Raka selling? Is it
just too hard to be like a single site process
of these days in this country?

Speaker 2 (03:21):
I guess it is one of those industries, you know
that where the margins are very slim and and if
you don't have a level of scale. It's it's very
very hard, right, So, you know what we figured, we're
not actually in the you know, one of the things
of the you know that I want the listeners to
take away I guess is we're not on the growth

(03:43):
for growth sake in this Jamie. But if you don't
have some level of scale in this industry, it makes
it very, very difficult because of the low margency. You
need some volume going through any need deficiency. So I think,
you know, if you are a single site operator, it's
always going to be a hell of a lot harder

(04:03):
to make ends meet if you haven't got the opportunity
to move milk around and take those official mind.

Speaker 1 (04:09):
You, Tartou is a single site operator. That's the most
successful cooperative in the country.

Speaker 2 (04:14):
Yeah, one hundred percent. You know, they've they've they've they've
specialized really well, and they've they've picked their markets that
align with their size and scale, and I mean, I
think they're they're one out of the box for sure.

Speaker 1 (04:27):
Just finally, Fonterra is sitting at eighty percent or just
under the total milk supply that goes through their doors.
Where does this put open country? You're obviously a clear second,
but as any are you in double digits for instance,
because I'm looking at Sinlay, Westland, obviously, tatua O Lamb,

(04:47):
there's other players out there.

Speaker 2 (04:49):
Yeah, I haven't got that. Those numbers in front of me,
I would estimate Jamie, it take us around thirteen thirteen
and a half percent on I'd take yes, I all
need to do those numbers. But we're a clear number
two on that. And we still think of ourselves as
a small company. You know, we're a company that started
twenty one years ago now and no try to know

(05:10):
our supplies by name. But like I said, you know,
there's a level of scale that has to be at
play in this industry to give everyone security, you know,
customer security and farmer supplies with their milk checks as well.

Speaker 1 (05:24):
Well. Congratulations the acquisitions. I don't know if they're going
to continue on, but two big ones in two weeks
Matara Valley Milk and now Miraka chief executive of Open
Country Dairy. He's building an empire. Mark de Latour, thanks
for your time.

Speaker 2 (05:38):
Thanks Jamming