Fonterra Co-operative Group Ltd has released its revised strategy, which will see the Co-op deepen its focus on its high-performing Ingredients and Foodservice businesses to grow value for farmer shareholders and unit holders.
This follows a strategic review that confirmed the Co-op’s strengths as a B2B dairy nutrition provider, resulting in Fonterra’s decision to explore divestment options for its global Consumer businesses.
CEO Miles Hurrell says Fonterra is in a strong position, delivering results well above its five-year average, which puts it in a position to think about the next evolution of its strategic delivery.
“As previously announced, we are exploring divestment options for our global Consumer businesses to free up capital and allow the Co-op to focus on what it does best.
“This process is ongoing and progressing well. It remains our intention to seek shareholder approval prior to divesting these businesses,” says Hurrell.
Looking out to the next decade and beyond, Fonterra has made six strategic choices. These are:
1. Deliver the strongest farmer offering – work alongside farmers to enable on-farm profitability and productivity and support the strongest payout.
2. Unleash the Ingredients engine – deepen Fonterra’s position as a world-leading provider of sophisticated dairy ingredients and build trading capability to grow both the Farmgate Milk Price and earnings.
3. Keep up the momentum in Foodservice – expand our successful Foodservice business in China and other key markets to grow earnings.
4. Invest in operations for the future – an efficient manufacturing and supply chain network that allows flexibility to allocate milk to the highest returning product and sales channel.
5. Build on our sustainability position – further improve the Co-op’s sustainability credentials and strengthen partnerships with customers who value this position.
6. Innovate to drive an advantage – use science and technology to solve the Co-op’s challenges and build on competitive advantages.
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