$7b in assets<\/a> have been sold since Fonterra started down this track under CEO Miles Hurrell in 2019.<\/p>\nSome assets, such as Chile\u2019s Soprole \u2013 bought by the Dairy Board in 1986 and sold in 2023 for $1b \u2013 clearly had no meaningful place in the Fonterra portfolio.<\/p>\n
In the big picture, there is potential for a slimmed-down Fonterra to recapture the optimism surrounding the co-op when it was formed in a three-way merger between the NZ Dairy Board, NZ Dairy Group and Kiwi Co-operative Dairies in 2001.<\/p>\n
Foreign Minister Winston Peters \u2013 never one to turn down the opportunity for a headline \u2013 described the Mainland deal as \u201cutter madness\u201d.<\/p>\n
Clearly, Fonterra\u2019s shareholders \u2013 many of them astute business people in their own right \u2013 see it differently.<\/p>\n
The co-op is their business, and theirs to do with whatever they wish.<\/p>\n
The sad part is that there seemingly was not the depth in the Australian and New Zealand capital markets to take up the challenge and launch Mainland as an initial public offer \u2013 an option that Fonterra considered up until the last minute.<\/p>\n
Since its inception, Fonterra\u2019s performance has been a bit patchy, peppered by some ill-advised investments and some outright bad luck with the false botulism scare and product recall of 2013.<\/p>\n
In recent years, the company has gone from strength to strength, reflecting in part the divestment process.<\/p>\n
The co-op has come a long way.<\/p>\n
The NZX-listed units, which one fund manager once said were \u201cuninvestable\u201d, now trade at about $8.26 \u2013 up 168% from two years ago.<\/p>\n
The shares \u2013 which farmers have to buy in order to supply the co-op with milk \u2013 have more than doubled to $5.95 over the same period.<\/p>\n
There have been wins and losses along the way.<\/p>\n
In both Ingredients and Foodservice, the co-op continues to innovate, led by Fonterra\u2019s Research and Development Centre at Palmerston North.<\/p>\n
Robust and well-thought-out capital management is vital for agricultural co-operatives, given the volatile commodities markets they occupy.<\/p>\n
If they get it wrong, they don\u2019t remain wholly farmer-owned co-ops for long, taking Westland Milk, Alliance Group, Silver Fern Farms, and Australia\u2019s Murray Goulburn as recent examples.<\/p>\n
It\u2019s been a long process getting Fonterra \u2013 arguably New Zealand\u2019s most important business \u2013 to this point.<\/p>\n
In rugby parlance, a leaner, nimbler Fonterra has been passed the ball by its farmers.<\/p>\n
Now, it just needs to run with it.<\/p>\n
Listen and subscribe to the Today in Business<\/a> podcast \u2013 the top headlines from the NZ Herald business team summarised and delivered by an artificial intelligence (AI) voice as an easily digestible recap.<\/p>\n","protected":false},"excerpt":{"rendered":"In addition, Fonterra will have $1b to spend over the next three to four years in projects to…\n","protected":false},"author":2,"featured_media":108185,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,21643,184,282,31499,554,70560,85,46,32347,18244,276,70559,5572,36015,269,273],"class_list":["post-108184","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-door","tag-economy","tag-facts","tag-fonterra","tag-for","tag-gray","tag-il","tag-israel","tag-jamie","tag-mainland","tag-of","tag-opens","tag-sale","tag-shine","tag-the","tag-to"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/108184","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=108184"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/108184\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/108185"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=108184"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=108184"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=108184"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}