Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
Last week, the co-op said 523 jobs would go in September from its central procurement, finance, information services, human resources, strategy and legal teams.
And it says that on August 5 it will begin consulting on new business structures with people in administration, ingredients sales, consumer, marketing, R&D, communications, health and safety, food safety and quality, group resilience and risk, property, procurement and change management.
The 523 roles will be disestablished at a one-off cost of $12m-$15m, making payroll savings of $55m-$60m.
Chief executive Theo Spierings says the news had been unsettling for the people affected but the co-op had to change to remain strongly competitive in today’s global dairy market.
“Reducing the number of roles in our business isn’t about individual competency; it’s about continually improving the way we perform.”
Spierings says the co-op’s leaders are working to increase value right across the organisation.
“The key aims of the review are to ensure the cooperative is best placed to successfully deliver its strategy, increase focus on generating cashflow, and implement specific, sustainable measures for enhancing efficiency.
“A simple example already identified by our supply chain team is [better use] of export containers leaving our distribution centres, saving up to $5m a year.”
The review includes measures to improve profitability in Fonterra’s Australian business and extra measures to achieve more value.
