Fonterra confirms NZ speciality cheese review

By Ben Bouckley

- Last updated on GMT

Related tags: Stock market, Fonterra

Fonterra confirms NZ speciality cheese review
Fonterra has confirmed to that it is undertaking a review of its New Zealand speciality cheese business Kapiti, but was unable to reveal whether any specific plants were earmarked for closure.

"I know that Fonterra Brands quite often reviews its manufacturing footprint, and is reviewing speciality cheeses at the moment, but there have been no decisions made."​ She referred to Fonterra Brands communications, who were unavailable as we went to press. 

However, a Fonterra Brands spokesperson told New Zealand paper Dominion Post​ that the company was reviewing all of its speciality cheese factories, including the Te Roto factory on the North Island, which the paper said employed around 66 staff.

The Te Roto site supplies speciality cheese such as creamy blue, brie and parmesan, and the spokesperson told the paper that no decision had been made about the future of the factory.

Starting out as an independent company in 1984, Kapiti Cheese was sold to Foodstuffs in 2003 and then to dairy processing giant Fonterra in 2005.

Controversial scheme

In separate news from Fonterra, the company will hold a special shareholders meeting on June 25 to try and quell opposition to its controversial Trading Among Farmers (TAF) scheme, which is opposed by a minority of shareholders.

The proposal - which Fonterra wants to introduce in November - would involve circa. 10,000 farmer shareholders buying and selling shares from one another through a market, rather than via the co-operative. Eighty per cent of Fonterra's farmer shareholders voted on TAF in 2010, and 90% approved the scheme.

Under its terms, farmers would also be able to free up share capital by placing some of their shares in a new Fonterra Shareholders’ Fund that would pay them accordingly, with payment including the rights to dividends and the gain/loss from any change in share market value.

The design involves the fund raising money that would be paid to farmers for shares they place there, by issuing units to outside investors, and giving the latter an investment linked to Fonterra’s financial performance, while ensuring the firm remains 100% farmer controlled.

Damaging Fonterra's reputation

This week, Sir Henry van der Heyden attacked a minority of farmer shareholders vocally opposing the scheme through the media. "This is in danger of splitting the shareholder base, and is not in the best interest of Fonterra's future,"​ he said.

"Instead of having the discussion among farmers and resolving the matter in the family, the debate is now spilling into the international media and damaging Fonterra's reputation and our global partnerships."

Together with Fonterra CEO Theo Spierings, van der Heyden said he had visited Asia last week and many customers, joint venture partners, potential future customers and staff the two met asked if the debate was impacting the co-operative's stability and reliability as a partner.

He added: "We have to put a stop to this and use the special meeting to unify the shareholder base so that we can get on with implementing the new refreshed business strategy [Fonterra's Stategy Refresh]. At the moment all we are doing is destroying value and compromising potential business opportunities."

Related topics: Manufacturers, Cheese, Fonterra

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