He said the co-op had lost $100 million profit in the Australian market. It was rationalising its brands and driving volumes down by taking a very focussed approach. Combining its Australia, New Zealand and ASEAN/Middle East/North Africa businesses as announced at the end of November would mean significant cost savings. Anlene was being launched in Saudi Arabia and China and Fonterra was close to signing an agreement in Europe.
In Asia he said there would always be issues in some countries with volume growth lower than market demand. In Latin America Fonterra was having discussions with its partner, Nestle, at present about how to drive harder and achieve a tighter focus to its activities.
Global trends which were significant to Fonterra were the rise of emerging markets and urbanisation, the nutritional benefits of milk for babies and toddlers, changing social demographics which meant more old people and a move to nutrition for healthy aging as well as an increased focus on sustainability.
Spierings said Fonterra had changed its view from having five businesses to just two; milk exported from NZ into milk pools where there was an imbalance between supply and demand and regional businesses, where NZ milk could be supplied or milk produced in those countries.
Building a durable co-op for the future meant Fonterra had to be ahead in the environment game with a strong strategy, it had to focus on making dairy products accessible, affordable and safe and it also had to increase the benefits for rural communities both here and overseas.
“It’s a huge journey but a fantastic journey which I have only lived for one of your 12 years.”
