The chairman of Murray Goulburn John Spark has apologised to its suppliers for the challenges it has created for them in the past 18 months.
"I am acutely aware of the many challenges our suppliers have faced over the past 18 months, some of which have arisen due to previous decisions made by the company," he said in the company's annual report released on Thursday.
Mr Spark said the strategic review, staged closure of plants at Edith Creek, Tas, Rochester, Vic, and Kiewa, Vic, and forgiveness of the Milk Supply Support Package were the start of turning the business around.
"However, further transformation is required to ensure the co-operative is the appropriate size and structure to meet the realities of our milk intake and market opportunities," he said.
The full strategic review would "provide a firmer base and more profitable position" for MG.
Details would be provided at the company's annual general meeting on October 27.
MG chief executive officer Ari Mervis in the report said the strategic review would ensure that the company had the most appropriate operating model, corporate structure and commercial arrangements in place.
The scope of the review included all operational aspects, including: Improved margin delivery and cost reductions. Access to capital. Ensuring commercial flexibility.
MG also announced that special director Mike Ihlein intends to retire from the board at the AGM.
Mr Ihlein was elected to the board in 2012 and is currently chairman of the finance, risk and audit committee and a member of the human resources committee.
Mr Ihlein will be replaced as a special director by David Grant, who will join the boards of MG at the close of the AGM.
Mr Grant is a non-executive director of Event Hospitality and Entertainment Limited (formerly Amalgamated Holdings Limited), where he is chairman of the Audit & Risk Committee and the Remuneration & Nomination Committee.
Previously, he was a non-executive director of iiNet Limited from 2006 to 2015 and chairman of their Audit & Risk Committee.
He is a chartered accountant and a graduate member of the Australian Institute of Company directors.
Mr Spark thanked Mr Ihlein for his contribution.
“Mike has made a valuable contribution to Murray Goulburn and we thank him for the expertise he has brought to the deliberations of the board during a period of profound change for the organisation,” he said.
Mr Ihlein said the last 18 months had been a difficult period for MG and its suppliers.
"However, I am confident that the necessary steps are being taken under the leadership of John Spark and Ari Mervis to stabilise the business and enable Murray Goulburn to rebuild its standing as a fundamental pillar of the Australian dairy industry," he said.
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