What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
In March 2011 Fonterra shipped 229,000 tonnes of product, but continued growth in global demand for dairy products combined with record milk production early on in the current dairy season has led to another spike.
In December, Fonterra closed the door on an export container every 2.7 minutes – 546 containers a day. Fonterra's exports account for more than a quarter of all New Zealand exports.
Fonterra trade & operations managing director Gary Romano says a good autumn and a mild winter created optimal grass growing conditions ahead of the 2011-12 dairy season.
"This helped create a wave of milk up about 10 per cent on a daily basis during the peak flow in late September through to November.
"While conditions were good overall, farmers did face extreme challenges including a near nationwide dumping of spring snow and flooding in some regions.
"Our farmers have coped tremendously, not just with bad weather but also the record milk flow which peaked at more than 80 million litres a day," he says.
Fonterra teams have gone the extra mile to manage the huge amount of milk this season and get value out of every drop of milk.
Romano says a huge effort has gone in from the moment the milk is collected, to processing, packing, storing and shipping.
Demand for high quality dairy products is still looking strong with South East Asia, China, the Middle East and North Africa driving the growth in exports.
"Dairy is becoming increasingly important in these markets as people grow wealthier and want access to more nutritious foods," says Romano.
