Fonterra - the next move

- Last updated on GMT

Related tags: National foods, Milk, Fonterra

Fonterra Cooperative, a New Zealand based dairy products company,
said on Monday that it has various growth options but remained coy
on its intentions towards Australia's National Foods, reports Dow
Jones.

Fonterra Cooperative, a New Zealand based dairy products company, said on Monday that it has various growth options but remained coy on its intentions towards Australia's National Foods, reports Dow Jones.

Fonterra chief executive Craig Norgate said the company's merger deal with Australia's Bonlac Foods is likely to add further fuel to market speculation about what Fonterra might do with its 17.7 per cent stake in Melbourne-based dairy producer National Foods.

"We are happy to let that speculation continue,"​ Norgate told reporters.

"We have firm views on various options we have got and in due course they will be revealed,"​ he said. Australian competition problems that could be raised might only involve Fonterra's operations in Perth and those of National Foods, he said in response to one question.

Norgate also said Fonterra expects to achieve cost savings of between NZ$10 million and NZ$20 million a year by the merger of its consumer dairy products with those of 50 per cent-owned Bonlac.

He said there was an option of eventually listing the merged company to be called Australasian Food Holdings.

The merger will create a manufacturing and marketing company with annual sales of over NZ$2.3 billion (€1.13bn). Products will include milk, ice cream, cheese, butter, yoghurt, processed meats and convenience foods.

Related topics: Markets, Fonterra

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