Administrators have been appointed to run beleaguered Victorian milk company National Dairy Products (NDP).
Deloitte Restructuring Services partners, Glen Kanevsky and Sal Algeri, were appointed voluntary administrators of NDP early this morning.
Voluntary Administrator and Deloitte Restructuring Services partner Glen Kanevsky said it was “early days, as far as our appointment is concerned.
“We are aware of recent media reports related to the company’s operations, but it would be inappropriate for us to comment on these reports,” Mr Kanvesky said.
“We need to do our own investigations to understand the events and circumstances leading up to our appointment.
“We are engaging with suppliers and other critical stakeholders and will provide them with further communications as soon as practical.”
Earlier this week, NDP managing director Tony Esposito admitted the company owed farmers between $1.2 and $1.3 million.
Most of the company’s 30 farmer suppliers have left the company in recent weeks, after claiming NDP had failed to pay them for milk.
It’s believed that resulted in a shortfall of around 50 million litres of milk for NDP, which supplies processors and dairy product manufacturers.
Mr Esposito said any outstanding payments would now be handled by the administrators.
“They will go through everything and see what we can put together,” Mr Esposito said.
“We sat down with our lawyers and over the last week and asked what the best action would be – that was the recommendation.
“They will go through all the accounts and work out what is available to them.
“It’s now in the hands of the administrator and we won’t know (who will be paid) until this process is gone through.”
He said he still had between two or four suppliers – “I don’t know the exact figure” – and several other farmers had expressed interest in joining NDP.
South Australian senator Nick Xenophon called on the Australian Securities and Investments Commission (ASIC) to carry out an urgent investigation of NDP.
He said suppliers had complained to him about the company.
“Mr Esposito needs to make a full explanation, to his suppliers, as soon as possible,” Mr Xenophon said.
Earlier this week, Mr Esposito admitted the company owed farmers between $1.2 and $1.3million.
Simpson supplier Alex Robertson, who has gone to Fonterra, said he was owed more than a quarter of a million dollars, for milk supplied to NDP.
“The problem is, they have no suppliers left,” Mr Robertson said.
“He still owes me $52,000 for September’s milk, he owes me $204,000 for October’s milk and autumn/winter payments of $11,000 – and he owes every other supplier a cheque from last month.”
Chris Gleeson, Crossley, said he was last paid on October 17, and was still owed $350,000 by NDP.
“Everyone is making profits, at the moment, and he can’t afford to pay his farmers,” Mr Gleeson said.
Mr Esposito set NDP up last year, after the collapse of United Dairy Power.
Donna Edge, Carpendeit, said she was still owed $9000, the balance of her autumn-winter cheque. She has since moved across to Murray Goulburn.
“He can’t understand why we all left,” Ms Edge said.
“There’s no correspondence, whatsoever, to tell me when they will pay me.”
She said suppliers had no choice, but to switch processors.
“It’s not rocket science, if you don’t pay, what are we supposed to do?,” she said.
“Farm Household Allowance and Aussie Helpers puts food on our table, he doesn’t.”
United Dairyfarmers of Victoria (UDV) president Adam Jenkins said his organisation had been working with supplier and government to assist those affected.
“No one likes this type of thing happening, we are trying to put some things in place to work out how this happened and to minimise that, and see where we do go to from here, in supporting those suppliers,” Mr Jenkins said.
“I think it is also the ability of the supplier to call someone out, when they don’t get paid, because there is a cat-and-mouse game that goes on, that if they leave, they say they won’t get paid, so they stay a little bit longer.
“That sort of attitude is very hard for a supplier, when they are banking on buying hay and grain, and if they leave, they may not get any money, but the longer they stay, the worse the situation gets.”
Mr Esposito set up NDP in April, 2015, after United Dairy Power closed.
He founded UDP, but sold it to a Hong Kong investor in 2014, before its parent company was placed in receivership.
By: Andrew Miller