Fonterra chief executive Miles Hurrell says the popular Open Gates initiative is likely to go bigger next year.
The co-op says a board working group – that includes independent directors Simon Israel and Clinton Dines - is “providing guidance and oversight” as the senior management team work to recover the investment.
Both Israel and Dines have significant China experience and expertise.
Fonterra chief executive Theo Spierings says the co-op is “working hard in the background” on the Beingmate investment.
Spierings acknowledged that revising the Beingmate investment is unacceptable to shareholders and unitholders. “The recovery of the value of this investment is the number one immediate priority for me and the senior management team.
“To be blunt, the investment in Beingmate has not gone the way we expected and there are things we would do differently knowing what we know now. We are very focused on doing all we can to get things where they need to be.”
As an 18.8% shareholder, Fonterra doesn’t have direct control over the Beingmate, which was the number one infant formula in China until two years ago.
But the co-op is working with Beingmate founder and majority shareholder Xie Hong to “influence its direction and an urgent business transformation”.
“We see there are a number of opportunities to reverse the current performance, unlock the distribution network and meet customers’ preferences for e-commerce,” says Spierings.
“While this seems like a slow process and we’re not allowed to share all of the information about Beingmate’s business, we are working hard in the background to get ourselves in a position where there is a tangible action plan for transforming Beingmate that we can share more widely and monitor progress,” says Spierings.