Fonterra consumer business sale price jumps to $4.22b
The sale price of Fonterra’s global consumer and associated businesses to the world’s largest dairy company Lactalis has risen to $4.22 billion.
Fonterra chairman John Wilson says overseas milk suppliers could be allowed to own shares in the co-op.
Speaking at the NZ Co-op business leaders forum in Auckland recently, Wilson did not rule out a co-op linkage with farmer suppliers in other countries.
“The opportunity to form some sort of cooperative linkage we certainly believe is possible,” he says. “It won’t be easy – surprise, surprise – but is certainly possible. My view is that those opportunities are becoming more real today than in the past.”
Wilson told the forum that of the 23 billion L of milk processed by Fonterra last year, NZ farmers supplied 17.5b L. The rest is collected and processed in Australia, South America, China, Sri Lanka and Europe.
The average farmer shareholder in NZ has $880,000 invested in the co-op.
Wilson points out that Fonterra has “very strong control and ownership mechanisms”.
The forum heard there is an appetite among overseas suppliers to own Fonterra shares but capital could be an issue.
Fonterra director Nicola Shadbolt told the business leaders forum that in her travels around the world she is often asked by farmer suppliers about the possibility of owning Fonterra shares.
“The ‘belonging’ is the bit they are missing,” she says. But this also means coughing up $880,000, so there’s “a slight cost” involved, says Shadbolt.
“But if there are other ways of structuring that, the belonging can still happen at no capital cost.... Some co-ops in the Nertherlands have class A and class B members. Class B members don’t have all the rights of class A members, so there are ways but this is an evolving issue.”
Shadbolt says Fonterra needs more milk to grow the business. “As demand for dairy grows, we need to have stickability with dairy farmers in other parts of the world. We don’t want not to have the milk.”
Federated Farmers dairy vice-chairman Chris Lewis says it’s a decision for Fonterra shareholders.
“If the directors and management of Fonterra can come up with an exciting proposal then farmer shareholders can debate and decide.”
Australian farmers some years ago expressed keenness to join as Fonterra shareholders.
North Otago farmer Jane Smith is standing for the Ravensdown South Island director seat.
"Unwelcome" is how the chief executive of the Horticulture Export Authority (HEA), Simon Hegarty, describes the 15% tariff that the US has imposed on primary exports to that country.
Fertiliser co-operative Ballance has written down $88 million - the full value of its Kapuni urea plant in Taranaki - from its balance sheet in the face of a looming gas shortage.
The Government and horticulture sector have unveiled a new roadmap with an aim to double horticulture farmgate returns by 2035.
Canterbury farmers and the Police Association say they are frustrated by proposed cuts to rural policing in the region.
The strain and pressure of weeks of repairing their flood-damaged properties is starting to tell on farmers and orchardists in the Tasman district.
OPINION: Milking It reckons if you're National, looking at recent polls, the dream scenario is that the elusive economic recovery…
OPINION: Sydney has a $12 million milk disposal problem.