Industry Analysis & Industry Trends
IBISWorld forecasts that industry revenue will grow at an annualised of 2.2% over the five years through 2012-13 to reach $3.78 billion. Prices declined slightly in 2009-10, due to falls in demand for the industry's products amid the global financial crisis. However, this was not enough to resist the growing strength of Australian dairy manufacturers in the international scene. The effects of this decline were also offset by dramatic increases in dairy prices the year before, and thus prices remained relatively high. In 2007-08, strong growth in world demand for dairy products outweighed supply growth due to supply constraints in some key exporting countries, which led to significant growth in world dairy prices... purchase to read more
Industry Report - Industry Investment Chapter
The Butter and Dairy Product Manufacturing industry exhibits a high level of capital intensity. IBISWorld estimates that the labour-to-capital ratio in the industry is 1:0.41. This means that for every $1.00 paid as wages, $0.41 is required as capital investment. Manufacturing plants, especially those of large-scale butter producers, require high levels of capital expenditure on sophisticated technology and equipment to increase automation without the need for additional labour.
The level of capital intensity varies greatly among industry players. Not surprisingly, the major producers have invested substantial amounts of capital relating to technology and production over the past decade, resulting in the level of capital intensity of the industry generally rising... purchase to read more