An update from Synlait's Acting CEO

Dear Farmers,

As many of you know, I’ve recently stepped into the role of Acting CEO. My two years on Synlait’s Board has given me a clear understanding of both the pain points the company is facing and the opportunities ahead.

It is important to me that you have trust and confidence in Synlait. Many of you have been with the company since its early days, through the good times and challenging periods.

As someone who has spent their career in dairy – starting on the factory floor, I know farmers are fundamental to this business. I also value the things many of you have told me farmers appreciate about Synlait – the high level of on-farm support, friendly service, sustainability expertise and the ability to earn more for your milk.

Accelerating Synlait’s financial recovery.

One of the questions I have been asked is whether I see a need to reset the executive leadership team – the answer is no. I am impressed with the team’s overall capability and am looking forward to working more closely with them.

Leadership changes can create uncertainty, particularly at times when stability matters most.

My role is to accelerate Synlait’s financial recovery. I know you’ll agree that the half year result (a net loss after tax of more than $80 million) was concerning. We need to move more quickly to get back to profitability for everyone who relies on Synlait – including you and your teams.

Synlait’s largest shareholder is behind us.

Bright Dairy has invested heavily in Synlait – providing more than $185 million in the 2024 equity raise and an additional $130 million as a shareholder loan.

Synlait’s poor performance is negatively impacting Bright Dairy’s own financials. They recently posted a loss on the Shanghai Stock Exchange for the first time in 17 years.

I’ve also been asked whether Bright Dairy intends on taking over Synlait. The answer to that is also a firm no. I have spent a lot of time with the Bright team – they are 100% supportive of Synlait and extremely keen to see us get back to success so we are no longer a drag on their financial performance. That is completely understandable.

Bright has a lot of valuable expertise which could help Synlait move forward so I am expecting to see more collaboration between the companies.

After 30 years in New Zealand, I consider myself a Kiwi but my Chinese heritage means I understand both cultures so I will be a valuable bridge between the Bright and Synlait teams.

Synlait has unique strengths.

We are one of only a few companies in New Zealand with the capability and scale to process fresh milk into finished infant formula products for global customers. That is a real competitive advantage.

The high-quality grass-fed milk supply you provide us is another advantage, alongside our Dunsandel facility’s ability to keep differentiated milk streams separate.

In the near term, we are focused on improving operational performance through strengthened quality systems – that will deliver the stability we need to be able pursue growth opportunities in the future.

Looking ahead three to five years, I see Synlait in a strong position – leveraging our competitive advantages to expand into other high-value products.

There’s no doubt we are working through a challenging period. Most importantly, we are looking forward – not back.

I will work hard to earn your trust. If you have any questions at all, you are welcome to get in touch directly.

Thank you for your continued support,

Leon Fung,
Acting CEO Synlait

Leon.fung@synlait.com
021 082 65958