Clover Industries: Towards a slimmer business
The dairy player is in the process of streamlining its operations so it can focus on high-margin products
Clover is restructuring its low-margin business, including raw milk production and the pricing of products such as nonvalue-added fresh milk, ultra-pasteurised milk and ultra-high-temperature milk. Essentially, this will allow the company to develop higher-margin, value-added products in dairy (like yoghurt) and other food categories, and eliminate its exposure to the “cyclical nature” of its low-margin business. There is, however, a strong whiff of paranoia underlying the eminent good sense of these actions, as the dairy producer is also at pains to address “misapprehensions” by investors over the pricing of raw milk. “There is a misconception ... that Clover, in setting the price for raw milk, may favour producers at the expense of profitability,” it says. “There is likewise a misconception by producers that Clover, in setting the price for raw milk, is improving profitability at the expense of producers.”
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