Fonterra finishes year with a flourish

Fonterra finishes year with a flourish

Fonterra has ended its 2005/2006 season on a high note, notching up record sales during May of 316,000 tonnes of dairy ingredients to customers around the world.

Managing Director Fonterra Ingredients John Shaskey said May was the first time the company had sold more than 300,000 tonnes of product in a calendar month, beating the previous record by more than 30,000 tonnes.

The 316,000 tonnes would fill a goods train stretching from Hamilton to Taupo.

May also saw the company’s sales to the United States (Fonterra’s biggest market) top US$1 billion for the 2005-06 season – another first.

Mr Shaskey said these were great results.

“The sales figures reflect both a huge effort by the ingredients manufacturing and sales teams and the benefits of a three year effort to improve efficiencies in Fonterra’s cow to customer supply chain,” he said.

The record sales came on the back of a record milk production year which had seen a late surge of milk due to excellent autumn conditions.

“With payment for the last quarter’s strong sales not coming until the new season, this is likely to have a temporary impact on cash flows and debt levels as we end the financial year.

“Looking ahead, forecast sales for June and July are also looking strong and this will put us in a good inventory position for when our production season really begins to crank up,” Mr Shaskey said.

Mr Shaskey said commodity prices were forecast to soften from last year’s historic highs, but demand remained steady. In addition, the work Fonterra had done to simplify and strengthen its business model was helping provide the competitive edge the co-operative needed to maintain New Zealand’s status as the world’s leading dairy exporter.

-ENDS-

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