Interim Results support the need for fundamental change
20 March 2019
The Fonterra Shareholders’ Council supports today’s acknowledgement that fundamental change is needed to improve the performance of the Co-operative.
“Fonterra’s farmer shareholders will agree that the results announced today are not where they should be,” says Council Chairman Duncan Coull. “The Shareholders’ Council backs the Board and Management’s initiative to thoroughly review strategy. A well defined and executed strategy focused on our farmers’ milk is critical to maintaining sustainable returns and an enduring co-operative for generations to come.”
Solid progress has been made on reducing operating expenditure, capex and the asset sales required to meet the debt reduction target.
“Our Co-op has challenges ahead of it in parts of our business in Australia, South America and China, where we need to see significantly improved margins to meet the earnings guidance,” says Mr Coull.
“As farmers and business owners, we accept that some change can take effect over a shorter term, while the more strategic outcomes will take longer to evolve. We encourage shareholders to be patient and empower the Board and Management with time, to ensure the right decisions are made to support the long-term futures of our farming families.
Mr Coull also said that yesterday’s announcement about the potential sale of Westland Milk Products has highlighted to Council how critical a strong Fonterra co-operative is for all New Zealand farmers as it underpins the milk price for the entire industry, which in turn flows through to regional New Zealand.