Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Fonterra: an unexpected journey

26 October 2012

Fonterra: an unexpected journey

Fonterra Cooperative Group’s Trading Among Farmers could be the start of a highly innovative and exciting chapter in its history.

“Cash is king as they say and I suspect more than a few bank managers will be starting their countdown timers,” says Willy Leferink, Federated Farmers Dairy chairperson.

“Given debt pressures facing some farmers, selling down a percentage of their economic interest in Fonterra, no more than seven percent, could be attractive. It is an option that has never existed before and I think some farmers will take it up.

“Kiwis will be able to share the success of the dairy industry, albeit indirectly through NZX listed funds. This could build an understanding of what we do and investors may be pleasantly surprised at just how ‘environmental’ dairy farmers truly are.

“The number of external unit holders of course depends on the take-up of farmer-suppliers. If each farmer-supplier invested $50,000 that hits the $525 million upper limit set for the fund.

“That won’t happen but we can depend on an exceptionally high level of industry interest. It is why I see potential for the greater use of ‘friendly capital’ from retired farmers, sharemilkers and even Fonterra’s own staff.

“This ‘Friends of Fonterra’ could enhance pathways into the industry. Many sharemilkers will be thrilled at the prospect of buying Fund units because units are convertible to shares, should a unit holder go farming in their own right.

“It is an innovative means to build and broaden someone’s capital towards the ultimate goal of farm ownership.

“For farmer-suppliers, a positive is removing that annual financial black hole we know as ‘sharing up’. While shares are still based on production, it becomes spread over three-seasons with shares being purchased from the farmer-shareholder market.

“In life, however, it is not necessarily where you start but where you end up. Trading Among Farmers changes the focus towards dividend performance. I am not saying that is a bad thing but it will mean different drivers.

“It puts real acid on the Board, management and Shareholders Council to deliver what we have been promised from Fonterra’s strategy refresh. Of which, I have to say, Trading Among Farmers is the centrepiece.

“Being the ‘union’ I suppose you can say, our role in this world-first is to watch out for how this benefits our members individually. I am optimistic but as we start out on this journey we must ensure it doesn’t lead somewhere unexpected,” Mr Leferink concluded.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news