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.
He says the lower share price has impacted farmer balance sheets.
“Given the level of farmer debt the board must focus on milk price, share value and dividend. Farmers have a lot of capital tied up in our cooperative and we must perform better,” he told Rural News.
Tuuta is one of five candidates vying for three Fonterra board seats; voting started last week and ends on November 6.
Other contenders are sitting director Ashley Waugh, former director Leonie Guiney, Zespri chairman Peter McBride and Canterbury large-scale farmer John Nicholls.
Tuuta, McBride and Waugh have been endorsed by Fonterra’s board and shareholders council.
Fonterra lost $196 million in 2017-18 in a $405m write down of its investment in the Chinese baby food company Beingmate.
The co-op is reviewing its strategy and investments, something Tuuta supports.
“It is important in light of the recent result that the board reviews its current portfolio and assesses the merits and demerits of each investment given the scarce capital and disappointing performance,” he says.
Tuuta is a shareholder and former chair of Parininihi ki Waitotara, a large Māori-owned farming venture in Taranaki.
“In that regard Fonterra and the dairy industry are a major part of the Taranaki economy but also the success of PKW to advance our aspirations,” he says.
“We want Fonterra to be successful; if Fonterra is successful and performs we also benefit.”
Tuuta completed the Fonterra Governance Development Programme in 2010.
He is also the Māori trustee, managing 100,000ha of Māori freehold land operating as dairy farms and leased out as dairy and dairy grazing land.
“I have a solid understanding of dairy farming and the value drivers of milk price,” he says.
Tuuta says he was encouraged by many shareholders to consider standing.
“I’m standing because I believe I have the skills and qualities to complement the existing capabilities of the board to add value. Like all other shareholders I want Fonterra to be successful and believe strong leadership and governance capability is required.”
Tuuta’s governance career includes former directorships of Tuiora Ltd, Taranaki Investment Management Ltd, Wools of New Zealand and the lobster export business Port Nicholson Fisheries Ltd.
He was a member of the Government-appointed investment advisory panel for the Primary Growth Partnership. And has been part of the Te Hono Steering Group since its inception, giving primary sector leaders exposure to emerging trends and Stanford University higher education.
