What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
In its 2011-12 annual results, Fonterra revealed a payment of $8.2m to a former employee and van der Heyden last month confirmed to journalists it was Ferrier’s final payment.
Last week van der Heyden, chief executive Theo Spierings, chairman-elect John Wilson and Fonterra Shareholders Council chairman Ian Brown fronted eight shareholder meetings around the country. Turnout was poor: an average of 80 farmers at each. The meetings were called to give farmers the big picture of 2011-12 accounts.
Van der Heyden attended three meetings: at Invercargill, Ashburton and Hawera. He told Dairy News Ferrier’s final payment was part of his opening address at each meeting. “I explained in a bit more detail the final payment and made it clear it has nothing to do with a golden parachute. It’s a lot of money but it has been accrued and included short-term and long-term incentives.”
TAF (trading among farmers) and Horizons Regional Council’s controversial One Plan also came up for discussion.
Brown conveyed his council’s decision to pass the fifth and final TAF precondition, giving the board a mandate to proceed with the launch of TAF. The fifth TAF precondition was the support of at least 50% of the Shareholders’ Council.
Van der Heyden says there were no negative comments on TAF. “It seems most farmers have accepted the June 25 vote and want us to get on with it.”
Wilson explained to farmers the board’s decision to reintroduce a resolution seeking constitutional changes and tightening limits on the size of the Fonterra Shareholders Fund.
Van der Heyden says the board is “not changing one word” in the resolution that narrowly failed to get the 75% vote required.
On One Plan, van der Heyden says farmers raised concerns about how it would impact farming in their regions. Fonterra has accepted an Environment Court decision to uphold strong rules designed to protect the environment and control land use. However, Federated Farmers has filed an appeal.
According to van der Heyden, the dairy industry needs a coordinated strategy on sustainability. “We’re a little behind the eight ball here but sustainability is on Fonterra’s agenda. We believe the future should be less about debate and more about Fonterra being at the decision table.”
Van der Heyden says decisions on sustainability must be in the interest of New Zealand and Fonterra wants to play a part at the decision-making level.
