Tuesday, 25 September 2018 09:55

Time to put things right at Fonterra

Written by  Sudesh Kissun
Andrew McGiven, Feds Waikato president. Andrew McGiven, Feds Waikato president.

Federated Farmers Waikato president Andrew McGiven says it’s up to Fonterra’s leadership to reverse its awful financial result.

“It was certainly disappointing and the size of the loss was surprising,” McGiven told Dairy News.

“But the ball is now firmly in the directors’ and senior management’s court as to how they review/revise the strategy to reverse this result.

“The key to this will be an improved communication and PR strategy towards shareholders and suppliers to ensure there is improved confidence from the grassroots so that milk supply is guaranteed.”

McGiven says while the $196 million net loss was “exacerbated by the Danone payout and the Beingmate writedown,” it’s not a good look for the co-op.

At its results announcement, chairman John Monaghan said the co-op is being clear with farmers and unitholders on what it will take to achieve the forecast earnings guidance.

“For the first time we are sharing some business unit specific forecasts. Among others, these see the ingredients and consumer and foodservice businesses achieving an EBIT of between $850 million and $950 million, and between $540 million and $590 million, respectively.

Lifting the performance of the co-op is a key priority for FY19, Monaghan said.

“We are taking a close look at the cooperative’s current portfolio and direction to see where change is needed to do things faster, reduce costs and deliver higher returns on our capital investments.

“[We will assess] all investments, major assets and partnerships against our strategy and target return on capital,” Monaghan says.


More like this

Milk payout dip no dampener

Dairy farmers generally are in good spirits despite Fonterra last week lowering its milk price forecast, says Feds dairy deputy chairman Wayne Langford.

Make your vote count

Stimulated by Fonterra posting a loss of $196 million, business analysts, academics and journalists have put forward their views on what is wrong with the cooperative and what is needed to sort it out. 

Let the games begin — Editorial

OPINION: Fonterra's upcoming director elections will be an interesting contest with a potential shake-up on the cards, which its board surely needs.


» Latest Print Issues Online

Milking It

Clink clink

The sound of milk bottles is set to return to Marlborough.

‘We help farmers’

Fish & Game took umbrage at a Milking It story on farmer Dean Rabbidge and his tweet. It says contrary…


» Connect with Dairy News