Fonterra reduces its global ambitions
New Zealand dairy company Fonterra has revealed a new strategy based on concentrating on its more successful ventures closer to home. Fonterra is striving to scale down its global ambitions following an unsuccessful venture in overseas markets, after posting an annual loss of NZ$605 million ($561 million) on 26 September 2019.
The company plans to phase out overseas milk pools, cut debt and concentrate on its local production. It also plans to focus on supplying dairy ingredients to global customers and building its business into foodservice in Asia Pacific.
The implementation of the new strategy has been attributed to the company’s poor performance from its overseas ventures, as it announced a writedown of up to NZ$860 million ($797 million) on assets in Brazil, Venezuela and China in August.
Fonterra is also said to be looking at options to reduce its financial stake in the Chinese infant formula business Beingmate.
CEO Miles Hurrell said 2019 was “incredibly tough” for the cooperative but it was also the year Fonterra made decisions to set it up for future success.
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