A slowdown in sales and delays in commissioning a new $20 million factory have been cited reasons for struggling Tasmanian yoghurt company Tamar Valley Dairy entering into voluntary administration.
Deloitte Restructuring Services has been appointed as voluntary administrator of the company which employs 170 people and is located near Launceston. The latest move follows public worries that surfaced in April this year when creditors granted the company more time to sort out what it at the time described as a short-term liquidity problem. It had emerged that the company owed creditors up to $9 million.
While Tamar Valley Dairy had reportedly been offered a cash lifeline of up to $8 million by four Australian food companies including Victorian dairy manufacturer Bulla, it's believed that company owner and managing director, Archie Matteo, preferred to keep the company in its current structure and ownership.
Deloitte Restructuring Services partner Glen Kanevsky was quoted as saying the 17-year-old business operated in an extremely competitive sector and had been ‘‘challenged by a slowdown in sales and pressure on margins’’.
The company has also blamed its financial woes on problems encountered during the commissioning of its new $20 million factory. The facility reportedly cost $2 million more to build than budgeted and opened eight months later than expected.
In 2011 the company had received a $600,000 grant from the Tasmanian government to open the new factory, which was established to help meet expected growth in the FMCG market on the Australian mainland. Last year it signed a 10-year contract to supply Coles supermarkets throughout the country with its products.
The new factory included three new production lines for such tasks as filling two-compartment tubs: yoghurt in one compartment and muesli in another compartment.
The Tamar Valley Dairy website is no longer operating. A creditors’ meeting is scheduled for 2 October in Launceston.
A slowdown in sales of its dairy product lines, as well as delays in commissioning its new factory, have been attributed to Tamar Valley Dairy's decision to seek voluntary administration.
