Fonterra seeks strong farmer mandate for sale
Fonterra chair Peter McBride expects a strong mandate from farmers shareholders for the proposed sale of its consumer and related businesses to Lactalis for $3.8 billion.
The plant produces cream for food service clients in Asia and pineapple flavoured ‘Kids Milk’ for China.
Year-round milk supply is needed for high value, short shelf-life products.
Fonterra chairman John Wilson says some farmers are moving off the strict grass curve and milking cows throughout the year.
“This gives us an opportunity to work with these farmers. We have signalled we need more milk for this plant over the next 18 months,” he told Dairy News. “Farmers in Waikato will now plan for that.”
Winter milk suppliers are paid a premium and get “deferential” transport pricing. They must spend heavily to commit to year-around milking, most needing to calve two or three times a year to produce quality milk in autumn and winter.
In addition to a premium price for winter milk, the suppliers need good returns from such a deal, Wilson says. “They are proud to see quality milk turned into high value products for export [but] also need to see returns coming in above milk prices.”
The Waitoa UHT factory was opened by Primary Industries Minister Nathan Guy last month. It has five production lines with provision for three more lines.
Fonterra global director operations Robert Spurway says 1200 staff and contractors completed the 12-month project. “We are proud of the finished plant.”
No milk is stored at the plant. Fresh milk arriving is immediately processed by heating for the required shelf life then turned into products.
Tetra Pak supplied the plant, which has a helix-shaped accumulator that allows filling lines to keep running during minor repairs and adjustments.
