Fonterra Prepares Contingency Plan for Consumer Division
Source: DairyNews.today
Fonterra has outlined a contingency plan to retain its consumer brands and businesses if buyer interest falls short or shareholders opt to keep the division, according to discussions at the co-operative’s annual meeting.
Chief Executive Miles Hurrell assured shareholders that the separation process would provide full transparency on the scope of the consumer division. "In New Zealand, this primarily involves Takanini and Eltham, but overseas, resources and personnel are integrated across operations," Hurrell said.
He emphasized that the sale process is not being rushed, noting, "We believe there’s a better natural owner than Fonterra, but this isn’t a forced sale. If shareholders or management decide to retain the businesses, we’ll have a clear understanding of their structure and potential to deliver desired returns."
Chair Peter McBride outlined what the co-op's "Plan B" would entail, should retention become the path forward. This approach would involve increased investment in capital, mergers, acquisitions, and research to strengthen the consumer division.
"You can’t run a consumer business with a transactional, in-and-out mindset," McBride stated. "If you’re in it for the long term, you need to double down when challenges arise. That approach doesn’t align with the capital structure of a co-operative."
The ultimate direction will hinge on shareholder sentiment and market dynamics as Fonterra navigates its strategy for the consumer brands portfolio.
He emphasized that the sale process is not being rushed, noting, "We believe there’s a better natural owner than Fonterra, but this isn’t a forced sale. If shareholders or management decide to retain the businesses, we’ll have a clear understanding of their structure and potential to deliver desired returns."
Chair Peter McBride outlined what the co-op's "Plan B" would entail, should retention become the path forward. This approach would involve increased investment in capital, mergers, acquisitions, and research to strengthen the consumer division.
"You can’t run a consumer business with a transactional, in-and-out mindset," McBride stated. "If you’re in it for the long term, you need to double down when challenges arise. That approach doesn’t align with the capital structure of a co-operative."
The ultimate direction will hinge on shareholder sentiment and market dynamics as Fonterra navigates its strategy for the consumer brands portfolio.
