Tuesday, 18 March 2025 07:55

Fonterra woos investors for consumer business

Written by  Sudesh Kissun
Fonterra’s Mainland Group CEO-elect Rene Dedoncker is leading the roadshow. Fonterra’s Mainland Group CEO-elect Rene Dedoncker is leading the roadshow.

The divestment process for Fonterra's global consumer business is gaining momentum, with the co-op meeting global fund managers this week on a potential listing of the co-operative's newly formed Mainland Group.

Fonterra has also changed the roles of some of its management team members to reflect its strategy of growing its foodservice and ingredients business.

The co-op is weighing up whether the sale of the business, including major household brands Anchor and Mainland and integrated businesses, will be by trade sale to industry players, or an initial public offering (IPO) to investors.

The roadshow is headed by Mainland Group chief executive-elect Rene Dedoncker and CFO-elect Paul Victor.

Fonterra chief executive Miles Hurrell says the meetings were an important step in the process of testing the merits and value of an IPO, which the co-op was exploring as a divestment option alongside a trade sale.

"We are pleased to be making progress in both the potential trade sale and IPO processes and will continue to keep our farmer shareholders, employees and the market updated on milestones."

The divestment will need Fonterra shareholder approval. The co-op is targeting a significant capital return to be made to farmer shareholders and unit holders following the divestment.

The sale was part of its programme to grow further value for Fonterra farmer shareholders through its foodservice and ingredients businesses.

Last week the co-op also announced changes to its management team as a next step in implementing its strategy.

Richard Allen will lead Fonterra's global Ingredients business as president - global ingredients, with his remit expanding to include the co-op's Ingredients businesses in Greater China and Middle East Africa.

Teh-han Chow will lead Fonterra's global foodservice business as president - global foodservice with his remit expanding to include the co-op's Foodservice businesses in South East Asia, Middle East Africa and other markets. In addition to this, Chow will continue as the CEO for Greater China.

Hurrell says as the co-operative moves to divest its Consumer and associated business, now is the time to make changes to management team roles responsible for driving end-to-end value through Fonterra's global Foodservice and Ingredients business.

"This is an exciting time for the co-op as we shift to the front foot and drive greater value creation through our high-performing Foodservice and Ingredients businesses. Enabling our teams to have a clear end-to-end view of our channels will strengthen their ability and focus to deliver end-to-end value to our farmer shareholders," says Hurrell.

"Both Richard and Teh-han have extensive knowledge across these channels, and I know they are placed to lead these teams to help the co-op deliver our strategic goals."

Dedoncker's title will change from managing director global markets consumer and foodservice to managing director global markets consumer as he leads the Mainland Group businesses in scope for potential divestment.

All four of Mainland Group's geographic regions have improved gross profit over the past three financial years, Fonterra's roadshow for potential purchasers has reported.

The Oceania division of New Zealand and Australia is the biggest with nearly $500 million gross profit, and 14% of revenue, in FY2024.

It is followed by southeast Asia on $293m and 36% gross margin, Sri Lanka $106m and 22% GM, and Middle East and Africa $41m and 17%.

The Mainland Group of consumer businesses in Fonterra has 15 manufacturing sites, 11 of which are in NZ and Australia.

The four further abroad are the Biyagama plant in Sri Lanka, the Dairymas and Susumas plants in Malaysia, and Sikarang in Indonesia.

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