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Bega Cheese Limited (ASX:BGA) is pouring up to $25 million into securing a long term, sustainable and growing milk supply provided to it by farmers.
The plan comes after the dairy company’s failed takeover bid for Warrnambool Cheese & Butter Factory Co (ASX:WCB) at the end of 2013.
In the face of increasing competition for milk the company is hoping to encourage existing suppliers to invest and sustainably grow their milk supply for the company.
Executing this strategy would allow Bega to secure longer term supply security to meet what it describes as ongoing global demand for its products.
Executive Chairman Barry Irvin says it is important for Bega to develop strategies to improve the link between the needs of the company and its suppliers.
Bega has already begun to meet with its suppliers and hopes to finalise its supply strategy following the meetings.
Bega Cheese reported a net profit of $18.7 million in the first half of the 2014 financial year.
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