Okato organic cheese dilemma

The company operating an organic cheese factory at Okato is struggling to survive a major financial crisis and there is talk of a rescue buyout by another party, possibly Korean.

New Zealand Organic Dairy Farmers' Co-operative chairman Malcolm Campbell says directors are meeting senior executives of Seoul Dairy Ltd there next week.

"It was scheduled to talk about their product requirements and future orders but their agent has said they may be interested in discussing investing capital in the company. It would be misleading to assume that is an indication of SDC's interest," he told the Taranaki Daily News yesterday.

"We are talking to several parties about financial support but I am not prepared to name any."

The factory began production in 2008, sourcing organic milk from throughout the North Island, and producing 20kg blocks for export, mainly to Asia. The company employs 20 to 30 people. However, it has struggled financially with the global recession of 2009 being a major factor.

Mr Campbell, a Whakatane milk supplier and shareholder, answered questions about the company's troubles yesterday, after earlier declining to talk.

He says he is owed about $100,000 in milk payout arrears.

"I'm a farmer in exactly the same position as other suppliers. Settling with the suppliers will require outside money. The situation is very difficult, but we are endeavouring to make progress."

The co-op's chief executive Patrick Geals has left. He resigned on March 1 after the co-operative delivered less than half of its promised $7 per kg of milksolids. As the outcome of a shareholder battle, Mr Campbell was elected chairman of both the co-op and Organic Dairy Ltd, replacing Tom Richardson (Whakatane) and Matt Hanna (Cambridge).

The board split was over some directors wanting the co-operative farmer controlled, while others were keen on seeking external investors.

Mr Campbell acknowledges the company has a financial crisis on and urgently needs a capital injection from somewhere.

Cambridge accountant Matt Hanna, who quit as a director in January, said on Tuesday: "I have no comment other than if Taranaki wants this business to succeed, don't punch it in the guts when it's in trouble."

"If your story is going to be negative to that business, you will do nobody any favours. It employs 30 to 40 people and it has every opportunity to continue doing so. It has a future as a viable business.

"The suppliers, I am sure, can make their own judgments."

Okato farmer and director Kevin Barrett, who is believed to have invested $800,000 in the company, referred inquiries to the chairman.

- © Fairfax NZ News