Watch this space for 'more than a tweak' to Fonterra plans
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‘More than a tweak but not radical,” is how Fonterra CEO Miles Hurrell describes the next update of the co-operative’s strategic review, which will be announced on September 30.
A “flavour” of where the co-operative is heading is detectable in recent investments in upgrades to some of Fonterra’s plants, he said, speaking at the announcement of the co-operative’s annual result for the 2023-2024 season.
“We announced, when we decided to have a look at the consumer business, we told the market we would come out and talk about what our business would look like. We will announce that on Monday.”
Hurrell said it is focused on Fonterra’s strengths – the core business-to-business aspect – and doubling down on that.
“We believe our ingredients and food service has a better future for this co-operative [than consumer], so we don’t shy away from the fact that we have had a very strong performance – it’s still not at the levels we would like to see over the long term.”
Fonterra completed a strategic review earlier this year that reinforced the role of its foodservice and ingredients businesses.
It led to an announcement in May that it is exploring divestment options for its global consumer business, as well as Fonterra Oceania and Sri Lanka.
The process is going as expected and the three investments announced in recent months support the strategy.
He said it is too early to say if any sales of the consumer business will lead to another capital return and Fonterra is still working to a 12-18 month timeframe for the review.
He was tight-lipped as to how far through the review Fonterra is, except to say it has appointed advisers.
“It’s about making sure we deliver on the business plans that we have set out there and hopefully the results today show we are well underway in that regard.”
Following the September 30 update, the next update could be at Fonterra’s annual meeting at New Plymouth in November.
But even at that stage, he said, it is highly unlikely Fonterra will be in a selling position for any of its brands.
