Milk growth 'critical' for Fonterra

Last updated 05:00 24/06/2014

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Milk from New Zealand dairy farms drives Fonterra's future, but there is work to be done on improving the company's reputation, says chief executive Theo Spierings.

He spoke at the South Island Dairy Event in Invercargill yesterday, addressing hundreds of local and national dairy industry stakeholders on the issuesfacing the sector.

Top of Fonterra's growth strategy was to become a globally relevant co-operative and part of that was to connect New Zealand farmers with millions of consumers around the world, he said.

Demand for globally traded dairy products was expected to reach 90 billion litres by 2021.

"Milk growth is critical for us to take advantage of this opportunity.

"There is room for more growth if it is done sustainably and we are going after that growth from our farmers and from new suppliers," Spierings said.

Sustainability and the perception of the company were crucial for driving success.

There was clearly work to be done on the reputation and people side of the business but Fonterra was still on a journey to become a globally relevant company.

The company needed to focus on the things that really made a difference in society, such as its Milk for Schools programme and fencing of waterways, he said.

"New Zealand has to be able to grow in a sustainable way."

Fonterra also wants to pump up its export volumes and has an eye to expanding to different markets.

The booming Russian market had been identified as a potential venture as it had the potential to be a bigger market than China in five years, but that would be determined by the terms of a trade agreement, if it reached that stage, he said.

At the same time, Fonterra was considering what reductions could be made in New Zealand to focus more on milk production.

Spierings said he was happy to leave cheese production to the big cheese-consuming nations such as Australia and the United States.

Fonterra had a real focus on the nutritional value of its products and was moving from just being recognised as the world's largest exporter of dairy to a co-operative that makes a difference in the lives of two billion people by 2025.

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- The Southland Times


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