30 | ‘Partnership’ with suppliers stands the test of time Open Country Dairy’s success is built on a strong relationship with its farmer suppliers. REGIONAL DEVELOPMENT Southland: Open Country Dairy CALL 03 211 1000 » » » » » » » SOUTHROADS.CO.NZ Specialists in civil and road engineering across Southland and Otago Drainage Earthworks Aggregate supply & cartage General siteworks Landscaping Subdivisions Driveways Expressing a special relationship, ‘A Partnership by Choice’, is boldly written on the side of the milk tankers travelling the well-worn roads from farm gate to Open Country Dairy’s processing facility in Awarua. It is a partnership by choice between the farmer suppliers and Open Country Dairy that has stood the test of time, ever since the company commenced its Southland operations fifteen years ago. “We have been operating for a long time now and have a strong reputation in the market,” says CEO Steve Koekemoer. “Farmers know we are a Kiwi-owned company, have always been competitive at the farm gate, and we pay faster. “So, it becomes quite a compelling reason for farmers to consider Open Country Dairy as their processor of choice.” With a very good supplier base at Awarua, Open Country Dairy’s payment system to farmers is different to all other processors in the industry. Rather than paying the farmers an advance rate and then settling at the end of the year, Open Country Dairy has four settlement periods through the year. “We end up paying our farmers in full on a quarterly basis, which makes the cash flow significantly better, especially in the environment we are in right now when borrowing rates are quite high. Richard Loader “Cash is king, and our philosophy has always been that it is the farmer’s money, and therefore we need to return it to them as fast as we can so that they can use it in the way that best suits them. That is what we have been doing for a number of years now and it has proven to be a very successful model for us and our farmers.” Steve says the farmer’s loyalty and support is not something that the business takes for granted. “Farmers know that without their milk we don’t have a business, and we also know that. “They also know it is a family business and we treat our farmers in that way. “We know our farmers’ names and our Chairman, Laurie Margrain, and I see them three times a year with farm visits and farmer meetings — providing updates on what is happening in the company and seeking their feedback.” Both Laurie and Steve have been part of the Open Country Dairy journey right from the beginning, providing the farmers with the comfort of a very stable management team. An electrical and mechanical engineer by profession, Steve classifies himself as employee number 1 and was the Head of Operations for a number of years before taking the mantle of CEO 10 years ago. “Over time we have built close ties with our farmers, because as we tell them, they are very important stakeholders, and that is key to us. “A farmer needs to have a very strong processor, know that they have somewhere for their milk to go long-term, and we know that we have to be competitive and make sure we always pay them a competitive price. “Even though we are not a cooperative, we keep getting told that we act in the spirit of one, and that has come from our founders and family business roots. “There is a good faith in the relationship. It works very well and we can see it in those farmers who have been supplying us from the very beginning. “They are probably our biggest advocates. As you get some scale, farmers believe in the business. It is very easy for them to promote the business to other farmers.” In a world where suppliers have choice, there is no deciding factor more compelling than feeling supported and a genuine relationship where your supply is valued and rewarded appropriately.
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