Editorial: A step forward for Fonterra
WARWICK RASMUSSEN - DEPUTY EDITOR
OPINION: If you're outside the dairy sector, the acronym TAF will probably mean little to you – but it should.
It stands for Trading Among Farmers and is one of the biggest changes to our biggest business and biggest exporter, Fonterra.
There are some technicalities surrounding it, but it means that the co-op can look at freeing up money within the organisation in a bid to expand and stabilise the business.
New chief executive Theo Spierings has made it clear that Fonterra has done well but needs to mature into a next-generation organisation.
The business has exceeded expectations since it was formed more than 10 years ago after the merger of neighbouring milk companies.
Since then, Fonterra has established itself as a world leader not only in the production of milk and milk products, but it has also opened up New Zealand exports to all corners of the world and has led the charge in industry innovations.
It is truly a world leader in the sector and has managed to do so while keeping control in New Zealand, which is no easy feat.
It's not all plain sailing, though – Fonterra still has a lot of work to do with its environmental track record, which is patchy, at best.
Freeing up money to expand its reach can only be a good thing for New Zealand. For our country to remain stable and proper, we need a strong Fonterra.
It may not be understood well by all New Zealanders but it is a vital and large cog that keeps our country ticking.
The TAF decision, made earlier this week, allows farmer shareholders to retain control, but it also releases some of the shackles that have slowed growth in the past.
The dairy sector isn't known for its rash or hasty decisions and it's that kind of productive nature that has helped make Fonterra the success that it is.
It took six years for the TAF decision to make its way from idea to reality and it has gone through many variations in that time.
It should serve the co-op and its shareholders well into the future. Who knows, one day Fonterra may even open up and list itself on the sharemarket. Imagine the interest if that happened.
ONE MORE THING: With state-owned asset sales a done deal, the dice have been cast. National has made good with its election promise and decided to (partially) cash in the country's chips. There may be deep division over the benefits of selling off businesses like Mighty River Power and Solid Energy, but it has been earmarked for some time. It's not as if National sprung it on people; they flagged it pretty early on last year and made it one of their key election platforms.
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