Expert Says Fonterra Backing Current Strategy With New CEO Appointment
The appointment of Richard Allen as Fonterra's new chief executive signals execution, not strategy, according to agribusiness expert Dr Nic Lees.
With the co-op’s financial woes well documented everywhere, reports of record results from others mean one thing: Fonterra’s strategy has been wrong all these years.
Look at Arla Foods, a European co-op nearly the same size as Fonterra. It’s total revenues for the six months ending June rose nearly NZ$9 billion -- NZ$25 million higher than the same period last year, backed by a 4.6% rise in branded product sales and higher sales prices. Net profit share for 2019 is expected to be in the target range of 2.8-3.2% of revenue.
And at home, Synlait reported an increase in profit to $82.2m, plus a total average milk price of $6.58/kgMS off revenue that exceeded $1 billion for the first time.
