The dairy company Conaprole presented a cost reduction plan due to a negative balance, despite having had a record income during the previous year, caused by a large increase in production costs.
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When closing the balance sheet between August of last year and this year, a record income of 1,047 million dollars was determined, although losses of 9 million dollars were recorded. Despite record sales and billing numbers, the balance sheets were negative for the dairy cooperative. “The costs revenue exceeded and, although a very reasonable negative balance was given, it is a negative balance in itself of about 9 million dollars,” explained the president. Conaprole, Daniel Laborde a Time of Change.
The influence of the markets
According to Laborade, within the income of last year, 351 million dollars came from the Internal market, which represented an increase of 21% year-on-year. Meanwhile, the foreign market represented revenues of 673 million dollars, about 34 million more than last year.
Brazil It represented 44% of exports in this period, which allowed producers to increase to an average price of 0.43 dollars per liter. This is followed by Algeria representing 111 million dollars and after China, Russia and Mexico which meant 40, 34 and 25 million dollars, respectively.
Meanwhile, other corners of the world represented an increase in exports of Uruguayan dairy. According to the director of Conaprole, Middle East quintupled its participation, the Southeast Asian tripled it and Latin America also almost tripled its shares.
Measures to reduce costs and increase income
The negative balance forced the company to cut costs. For this, the cooperative presented a cost reduction plan of 15 million dollars for the next fiscal year. “This plan represents in the tone of the dollar cent per liter of milk. So, let’s hope that in this exercise one cent of a liter of milk is represented in that cost drop”, estimated Laborde.
The president of the company assured that the plan aims to process improvement in the plant, mainly in the processes of whole milk powder, which suffered a drop in price. On the other hand, Laborde explained that investments are going to be reduced and what is strictly necessary will be done and there will surely be a reduction in marketing.
On the other hand, he announced that the use of buttermilk and cheese – which were previously transformed into products of little value – will be oriented towards the production of dairy products. In that sense, Laborde assured that this will not affect the quality of the products.
Regarding income, although Conaprole has a high participation in the domestic market, Laborde explained that the company’s intentions are to increase its income between 15% and 16% by focusing on more efficient product distribution.