Sixty former and new suppliers have joined Australian dairy cooperative Bonlac this year, showing increased confidence in the group's recovery.

Chairman Noel Campbell reported operating profits after tax of A$37m (US$20.2m), compared with net profits worth A$41m last year. The company has managed to reduce its debt from A$286.3m to A$29.2m, although chief financial officer Mark Smith conceded that the debt level remains a problem.

At the end of last year, New Zealand mega-dairy Fonterra acquired Bonlac's international brands for A$30m. In June Bonlac went on to sell its 50% stake in Bonland Dairies in exchange for an 11.4% interest in Fonterra's Australasian Food Holdings, which generated a book profit of A$120m, reported the Herald and Weekly Times.

The sluggish milk commodity market is not helping Bonlac's recovery, but Smith said that the company had been able to pay producers a competitive price. "Bonlac's number one objective for the year was to stabilise - then grow - our milk supply and to do this we needed to pay a competitive milk price," he commented.

Bonlac's Camperdown plant remains on the market.