Fonterra Co-operative Group Limited
Location: Headquartered in Auckland, New Zealand, Fonterra operates on a global scale.
Financial Performance
In the most recent financial year, Fonterra reported a robust 14% increase in revenue, reaching approximately NZD 20.6 billion. The company\'s net profit rose by 8% to NZD 729 million. After-tax profits in the third quarter were NZD 1.158 billion, marking an 11% increase from the previous year. Fonterra\'s turnover was €13.3 billion, with total revenue reaching USD 26 billion.
Key Events and Developments
Fonterra has been actively restructuring and divesting to strengthen its financial position. Notably, it divested its Australian assets to Lactalis for USD 3.845 billion, with plans to return USD 3.2 billion to farmer shareholders and unit holders through a tax-free capital return. The company is expanding into Japan's premium dairy market and introduced "Anchor Easy Bakery Cream" in China. Additionally, Fonterra is investing NZD 150 million in a new UHT cream plant in Edendale, creating 70 new jobs.
Strategic Plans
Under CEO Miles Hurrell, Fonterra is committed to sustainability, aiming for coal-free operations on the North Island by 2025 and plans to divest the Oceania Division by the same year. The cooperative is considering IPOs and asset sales to enhance nutritional solutions for aging populations. It anticipates stable milk prices between NZD 10.00 and NZD 10.25 per kgMS for the 2024/25 season, with a record forecast for organic suppliers at a midpoint of $12.30/kg MS. Fonterra encourages conventional farmers to convert to organic production to sustain growth.
Leadership Changes
Significant governance changes occurred with Andy Macfarlane stepping down from the board after eight years, prompting new leadership elections.
Challenges
Despite a solid financial performance, Fonterra faces challenges, including labor disruptions in Tasmanian facilities due to strikes over wage parity. Additionally, Greenpeace has targeted the cooperative for contributing to nitrate contamination.
Strategic Realignment
Fonterra is refocusing its strategy on milk processing, emphasizing its Foodservice and Ingredients segments. A planned USD 4.22 billion sale of its global Consumer and associated businesses to Lactalis will allow Fonterra to concentrate on high-margin operations. The company has demonstrated resilience, notably during Cyclone Gabrielle, by effectively leveraging its sector-specific assets and community trust.
Environmental Concerns
Environmental challenges persist, with accusations from Greenpeace regarding nitrate contamination and its impact on Canterbury’s drinking water, highlighting the need for continued focus on sustainable practices. Fonterra's Darfield facility processes 7.5 million liters of milk daily. Fonterra’s Darfield plant in Canterbury, New Zealand, produces 100 tonnes of cream cheese primarily for the Chinese market. It features the world’s largest whole milk powder dryer with a processing capability of 33 tonnes per hour.
Modified: 2025/10/07
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