Tough decisions for Kaimai
Artisan cheesemaker Kaimai Cheese is to outsource most of its production as it battles to stay in business against supermarket shopper resistance to specialty prices.
Chairman Wyatt Creech said the seven-year-old Waikato company would also lease out some of its Waharoa factory to another dairy product manufacturer and make just enough of its own cheese on site to supply its cafe and retail shop on the property, which were performing well.
Last financial year's result still has to be audited, but Creech expects the company to make a loss of about $1 million.
He estimates shareholders have sunk $5m into the venture.
Most of the shares are owned by board directors, he said.
The market for specialty cheese had "definitely shrunk" in the economic downturn. The cost of making specialty cheeses was high but shoppers had not been willing to pay specialty cheese prices in supermarkets, he said.
"I expect the wine industry is finding the same thing."
Kaimai Cheese has 470 shareholders. Creech said one shareholder meeting had been held to discuss the board's restructure plan for the business. Another meeting was planned for when the accounts were audited, either before Christmas or early next year.
He said the restructure was expected to produce a profitable result for the financial year ending March 2014.
Four staff had left under the early stages of the restructure. All had found jobs, he said. Twenty staff have been retained to run the cafe and retail shop.