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.
The co-op’s new site at Heerenveen in the Netherlands was officially opened overnight by King Willem-Alexander; Fonterra chairman John Wilson and chief executive Theo Spierings were also present.
The Heerenveen consists of two plants side by side; Dutch processor Royal A-ware’s plant produces cheese for its customers in Europe, while Fonterra’s plant processes the whey and lactose from A-ware’s plant, as by-products of the cheese-making process.
The 25-hectare site represents a significant investment and will give Fonterra cost-effective, reliable and continual access to high-quality whey and lactose, to use in manufacturing high-value paediatric, maternal and sports nutrition products.
Spierings said the site was an integral part of Fonterra’s long-term strategy for building global milk pools.
“Our strategy is a good fit with A-ware’s long-term vision, so it’s a win-win for both companies and it’s great to see the partnership come to fruition,” Spierings says.
“We have substantial intellectual property in manufacturing functional whey protein ingredients, and having a high-quality, high-volume source based in Europe will allow us to commercialise these innovations for our customers all over the world.”
It is Fonterra’s first wholly owned and operated ingredients plant in Europe, processing one billion litres of milk each year, and producing 5,000 metric tonnes of whey protein and 25,000 metric tonnes of lactose annually.
The partnership increases Fonterra’s ability to access a globally traded whey protein and lactose market that was worth more than NZ$2.7 billion in 2014.
The King was given a tour of the site, talking with employees and seeing first-hand how the partnership works.
