Tuesday, 06 July 2021 07:55

Fonterra milking it in China

Written by  Sudesh Kissun
Fonterra chief operating officer Fraser Whineray. Fonterra chief operating officer Fraser Whineray.

Fonterra is enjoying solid returns from its China business as the country pushes the benefits of dairy during the Covid pandemic.

Sales of probiotics in China rose six-fold last year. Fonterra sends one third of its milk solids to China as ingredients, food service and consumer products.

Speaking at a recent Smaller Milk and Supply Herds (SMASH) conference in Cambridge, Fonterra chief operating officer Fraser Whineray said the Chinese economy had bounced back strongly, helped by the Government's ability "to lock things down pretty hard and open them up quickly".

"And the Chinese Government has really been pushing the benefits of dairy through Covid," Whineray says.

During the pandemic, people in certain Chinese demographics - children, pregnant women and the elderly - were urged to lift their daily dairy intake from 300 to 500 grams.

"Of course that's only 200 grams but there are just lots of people and when that happens, that can put quite a surge on," Whineray says.

"But largely it was leaning in to the notion of the nutrition that dairy is actually capable of doing."

Whineray says yoghurt was a key part of the growth, backed by cultures like probiotics that go into the product.

"We lifted our probiotics sales about six fold into China over the last year... This might only have been another 3.5 tonnes but when those things fetch for itself $3m/tonne, that actually does make a difference."

Fonterra probiotics in China are sold in pottles and made at its Palmerston North plant.

Whineray says there was a lot of positive referencing of the nutritional benefits of dairy during Covid.

"That's ultimately what we are here for - to deliver dairy's health benefits globally."

He noted that on average the global economy is strongly rebounding.

"There are some pockets that are well behind, some bits are very strong... the bits we are attached to tend to be doing very well economically.

"One economy going very well is China and it is about one-third of the milk solids.

"If you divide the world up and you look at the bits where we don't have massive trade barriers, and we can't get in easy behind the border, and the population of the remaining world that can actually afford NZ milk solids, then it's not out of proportion to have one third going to China," says Whineray.

Doing The 'Mahi'

Fonterra's chief operating officer Fraser Whineray has paid tribute to the co-operative's 6,500 overseas workers for their efforts during the Covid pandemic.

Despite some not having access to good health systems, having to pay for vaccinations and not living normal lives, they have kept "doing the mahi", says Whineray.

Fonterra's team in Saudi Arabia stayed in the factory for two weeks during the country's lockdown to ensure the plant kept running.

In Chile, Covid was so rife that every member of Fonterra's team would have known someone who either died or was seriously ill from the virus.

In Sri Lanka, staff set up distribution centres at their homes to ensure they could get Fonterra products to their communities and neighbourhoods since traditional distribution channels were jamming up.

Fonterra's US staff have been working from home for nearly a year, says Whineray.

"I mean, we've had our challenges here and still do getting labour in... they've had sme pretty interesting experiences."

While most Fonterra staff in New Zealand have had minimal disruption, Whineray, who joined the co-operative in March last year, hasn't met two members of the executive team in person.

More like this

Winston Peters questions Fonterra divestment plan

Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.

Editorial: A new era for two co-ops

OPINION: Farmer shareholders of two of New Zealand's largest co-operatives have an important decision to make this month and what they decide could change the landscape of the dairy and meat sectors in New Zealand.

Should co-op sell its consumer brands?

OPINION: As CEO of the Dairy Board in the 1980s I was fortunate to work with a team of experienced and capable executives who made most of the brand investments that created the international consumer business Fonterra inherited. Soprole in Chile was the largest, but there were more than 20 countries where consumer marketing companies were established and Anchor and other brands were successfully launched.

Featured

'One more push' to eliminate FE

Beef + Lamb New Zealand (B+LNZ) is calling on farmers from all regions to take part in the final season of the Sheep Poo Study aiming to build a clearer picture of how facial eczema (FE) affects farms across New Zealand.

Winston Peters questions Fonterra divestment plan

Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.

National

Machinery & Products

New McHale terra drive axle option

Well-known for its Fusion baler wrapper combination, Irish manufacturer McHale has launched an interesting option at the recent Irish Ploughing…

Amazone unveils flagship spreader

With the price of fertiliser still significantly higher than 2024, there is an increased onus on ensuring its spread accurately at…

» Latest Print Issues Online

Milking It

Tough times

OPINION: Dairy industry players are also falling by the wayside as the economic downturn bites around the country.

MSA triumph

OPINION: Methane Science Accord, a farmer-led organisation advocating for zero tax on ruminant methane, will be quietly celebrating its first…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter