Farmers back Fonterra’s rescue plan - chair claims

Farmers also support the appointment of Miles Hurrell as the interim chief executive, he says.

Speaking to Rural News after a round of farmer shareholder meetings last month, Monaghan said farmers are confident the co-op is in good shape.

Fonterra’s poor financial performance - the co-op recorded its first-ever loss last financial year -was raised by farmers during the meetings attended by Monaghan, Hurrell and chief financial officer Marc Rivers; about 2000 farmers attended.

The loss-making investment in the Chinese baby food company Beingmate was also top of the agenda during the question and answer sessions.

Monaghan says Fonterra farmers are keen to put the disappointing results behind them but wanted to know what steps are being taken to lift performance. He revealed that the Beingmate saga will be resolved first; a senior management team was in China for talks with Beingmate bosses.

“We have given farmers no definite timeframe but I’ve assured them that Beingmate is the first item on the list,” he said. “Our farmers are very interested in the performance review; we will keep them updated and no one will die wondering.”

Monaghan says while farmers were concerned about the $439 million write-off in Beingmate they were happy with the China business.

“While Beingmate has been disappointing, overall we have grown revenues from the China business to $4 billion.”

Federated Farmers Waikato president Andrew McGiven says the ball is now firmly in the directors’ and senior management’s court as to how they review and revise the strategy to reverse last year’s result.

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

A South Canterbury farmer and candidate for the Fonterra board election, Leonie Guiney, says she expects the new leadership team to act on loss-making assets. She says shareholders seemed prepared to give Hurrell a chance and she was encouraged by his presentation at a shareholder meeting in Ashburton.

“I would expect action on loss-making assets in the near term if he is to be able to strengthen our position to invest where we have advantages,” she says.

Guiney says she heard no indication that shareholders favour splitting up the co-op as some commentators have suggested.

“That is not the solution; I heard a desire for change in the way we operate not to abandon the co-op model.”