Fonterra restructures its operations unit

By Mike Stones

- Last updated on GMT

Related tags: Fonterra, Management, Value added, Milk

New Zealand dairy processor Fonterra has restructured its operations into a single strategic business unit and restructured its top management team.

The new business unit, Fonterra Operations and Trade (FOT), combines all functions from the farm gate to the company’s global trade customers. These include: Milk supply, shareholder relations, milk collection, NZ operations, offshore milk sourcing and processing, supply chain, sustainability, government relations and global trade.

Fonterra’s CEO, Andrew Ferrier, said the changes would deliver efficiencies in the core business and provide greater focus to the company’s global ingredients business. “For our strategy to be successful, Fonterra’s core must continue to get more and more efficient,” ​said Mr Ferrier. “That will always be fundamental. The quality of our milk right across our supply chain will also always be fundamental to our success.​”

He identified significant opportunities in growing Fonterra’s partnerships with key global and large regional customers through the increased focus on value-added products and services.

Gary Romano has been appointed as FOT’s managing director Operations and Trade.

Dairy ingredients

Andrei Mikhalevsky becomes managing director Fonterra Global Ingredients and Foodservices. This portfolio ranges from commodities used in high-value markets to specialised dairy ingredients and foodservice products. Mikhalevsky will also be responsible for the company’s Latin American consumer products activities.

Meanwhile, Fonterra has been ranked as the world’s number one milk processor by global industry research group, International Farm Comparison Network (IFCN).

The organization studied 600 milk processors in more than 70 countries and placed Fonterra’s total annual volume of milk processed ahead of Dairy Farmers of America, Nestlé, Dean Foods and FrieslandCampina.

Global business

Ferrier said the ranking reflected the global reach and scale of the company’s business. “With 80 per cent of our milk supply coming from our 10,500 New Zealand farmer-shareholders and processed into over 2 million tonnes of export product every year, our local operations, which employ about 10,000 of our staff, are the cornerstone of our global business," he said.

Aside from the size and scale of the company’s operations, Ferrier identified the company’s strength as its ability to partner its customers to add value to their businesses. “We may be processing more milk than anyone else, but at 2.7 per cent we still only account for a fraction of the total world milk market.

“The way we differentiate ourselves is through achieving the best quality, offering the most innovative dairy solutions and delivering product on time to meet our customers’ changing demands. This is our true strength​,” he said.

Related topics: Markets, Fonterra

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