Norco success: More profits to farmers, thanks to local support
NORCO dairy farmers received good news when chief executive Brett Kelly announced a "retrospective step-up payment" after the co-operative beat profit targets for the first 2016/17 financial quarter.
Mr Kelly said Norco was now able to pay an extra half a cent on projected milk payments to its 221 dairy farmers across northern NSW and south-east Queensland.
"We're 30% ahead on our budgeted profit, predominantly from our rural agribusiness but branded sales from our milk business are also up 23%," he said.
Norco's board recorded sales of $540 million in 2015/16, 5.7% up on last year, Mr Kelly said.
"We're aiming to be a billion dollar business in the next four or five years. We've grown from a $300 million business eight years ago to an annual turnover heading towards $600 million this year," he said.
Mr Kelly said while most of the extra profit came from Norco's 30 farming equipment stores, consumer will to support dairy farmers had also paid off.
Direct retail sales of Norco milk, ice cream and other dairy products was up 12% in the first quarter and sales had also lifted by 11% in hospitality outlets.
"One of the things we're doing is a big push on the Norco branded story in the coffee houses," said Mr Kelly. "You hear a lot about the origin of coffee and so on when you got to a cafe but you don't hear anything about the milk."
Mr Kelly said the company was planning for expansion.
"We're getting a foothold in Sydney and also the cafe market in Melbourne," he said. "The consumer is making a decision when they're buying milk, with more awareness of farmer branded products.
"We are the last 100% farmer owned dairy co-operative in the country.
"We're 121 years old and our board of directors are all farmers."
When asked to speculate on the next financial quarter, Mr Kelly said: "That's a tough one. We're hoping to keep going as we are but we've just got to take it a month at a time."
"Ice cream sales are up."