Fonterra announces sale of Farm Source livestock division
By Rebecca Howard
Jan. 9 (BusinessDesk) - Dairy cooperative Fonterra is selling its Farm Source division to Carrfields Livestock – a livestock agency provider - as it reviews all aspects of its business.
“In the context of the review of the co-op’s assets and investments, we have made the decision to sell the livestock division to Carrfields Livestock. This will better serve the livestock team and the farms they service," said Richard Allen, Farm Source stores director.
The dairy giant is currently reviewing its entire business as it seeks to address poor financial results. Late last year, Fonterra confirmed it would pull out of its joint venture with Beingmate in China and take back full ownership of the Darnum plant in Victoria by the end of the year. Ownership of ice cream maker Tip Top is also under the microscope and its under-performing Chinese farms are also the subject of "heightened focus".
Carrfields will take over Fonterra's livestock arm on March 1. A Fonterra spokesperson said the price was commercially sensitive.
“While Farm Source’s livestock division has contributed positive returns since inception, we believe the investment required to maintain and grow this division can be more effectively targeted towards improving core areas of the Farm Source business,” Allen said.
Farm Source is a network of 70 stores nationwide and has included a livestock division since 2005. In 2017 its 25 agents facilitated the purchase of almost 200,000 animals, Fonterra said.
The two companies are working to ensure a competitive offer remains for Fonterra farmers as well as a smooth transfer of employees and clients. Fonterra said it will look for new opportunities within the cooperative for a small number of employees who won't have the option to move to Carrfields.
Craig Carr, Carrfields' group managing director, said the acquisition will take the firm's livestock team to more than 150 agents spread right across the country.