Fonterra Co-operative Group Limited

Location

Fonterra is headquartered in Auckland, New Zealand, and is a major player in the global dairy industry.

Financial Performance

Fonterra has shown strong financial growth with a revenue increase of 14%, reaching approximately NZD 20.6 billion. The net profit increased by 8%, totaling NZD 729 million, and the after-tax profit for the third quarter was NZD 1.158 billion, marking an 11% rise compared to the previous year. The company also reported a turnover of €13.3 billion.

Key Events and Developments

Fonterra has been actively involved in restructuring and divestment plans, aiming to divest NZD 1 billion in assets to streamline its operations in Australia and Sri Lanka. The cooperative faces decarbonization challenges as it seeks to meet its 2030 sustainability goals. In a strategic move, Fonterra is expanding into Japan's premium dairy segment to capture demand for high-quality products. The company has also been involved in legal proceedings, including a trademark dispute with Bega and a lawsuit from Greenpeace Aotearoa regarding its product labeling.

Recent Developments and Strategic Plans

Fonterra is investing NZD 150 million in a new UHT cream plant in Edendale and has launched "Anchor Easy Bakery Cream" in China. The company has secured NZD 250 million in bond capital to enhance financial flexibility and plans to finalize the divestment of its Oceania Division by 2025. Additionally, Fonterra aims for coal-free operations on the North Island by the same year. Under the leadership of CEO Miles Hurrell, the company is focusing on sustainability and innovation, including the "Farmer Forward Program" in collaboration with Mars to boost dairy farm sustainability. Fonterra is also exploring IPOs and asset sales to strengthen its market position, with a commitment to advancing nutritional solutions for an aging global population.

Market Projections and Sustainability

Market forecasts for Fonterra indicate stable milk prices between NZD 10.00 and NZD 10.25 per kgMS, with a positive outlook for the 2024/25 season. The company has announced a record new season forecast for organic suppliers, with a midpoint of $12.30/kg MS, driven by strong demand and limited supply. Fonterra is selling its global consumer business to Lactalis for $3.845 billion, excluding Greater China, aiming to return approximately $3.2 billion to its farmer shareholders and unit holders through a tax-free capital return.

Leadership Changes

Significant governance changes are taking place at Fonterra, with Andy Macfarlane stepping down from the board after eight years, prompting elections for new leaders. This marks a significant shift in the cooperative's governance. Fonterra's sale of its consumer dairy business to Lactalis reflects the cooperative's strategic focus on its core dairy ingredients business, processing around 16 billion litres of milk annually.

Modified: 2025/09/17