New Zealand's Fonterra sells money-losing Chinese farms

[+to_dave007 5,721]

NEVER Expected New Zealand MILK would come from China
 

Quote

New Zealand's Fonterra sells money-losing Chinese farms for $370m

SYDNEY -- New Zealand's top dairy producer, Fonterra Co-operative Group, said Monday it agreed to sell off farms in China for a total of 555 million New Zealand dollars ($368 million).

In two separate deals, Fonterra will transfer seven farms altogether to an affiliate of Inner Mongolia Yili Industrial Group and to Beijing Sanyuan Venture Capital. The transactions are expected to close by the end of July, pending approval by Chinese authorities.

For months, Fonterra has considered a sale of its Chinese farms, which have been losing money. The company looks to divest its two remaining Chinese farms, operated jointly with a U.S. partner.

Fonterra has operated dairy farms in China's Hebei Province since 2008, and in Shanxi Province since 2015. But unlike in New Zealand where grazing is the norm, dairy farmers in China must purchase feed.

The extra costs contributed to the persistent red ink. During the fiscal year ended in July 2019, the Chinese farms recorded over NZ$200 million in impairment losses.

Fonterra CEO Miles Hurrell said in Monday's statement that the company has reviewed its portfolio during the past 18 months.

"Selling the farms is in line with our decision to focus on our New Zealand farmers' milk," Hurrell said.

Fonterra began in 2001 as a merger of dairy cooperatives. The group actively expanded its overseas footprint. But that activity yielded underperforming operations in China and elsewhere, necessitating a radical shift in strategy under Hurrell, who became the permanent CEO in March 2019.

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[+Salty Dog 67,333]

8 minutes ago, to_dave007 said:

NEVER Expected New Zealand MILK would come from China

I'm not sure it is. The article doesn't say they were exporting it or marketing it as New Zealand milk.

More likely it was for the Chinese market...

[+to_dave007 5,721]

41 minutes ago, Salty Dog said:

I'm not sure it is. The article doesn't say they were exporting it or marketing it as New Zealand milk.

More likely it was for the Chinese market...

Perhaps.. but here in PI lots of NZ milk..  and I will wonder next time where it really comes from.

Two big Canadian brand names were caught bringing in products from China, and disguising them as "Product of Canada" under their well known brand name.

 

Edited October 13 by to_dave007

[Jess Bartone 1,796]

It's kinda funny how many first world corporations are pulling out of China, feels like someone killed the golden goose.

[CardiacKid 2,298]

Don't forget that Fonterra was caught up in the baby formula scandal a few years ago. The Chinese were adding melamine to the milk powder to fool protein quantity tests. In that case the Chinese executed the plant manager and his quality control manager.

[+to_dave007 5,721]

2 hours ago, CardiacKid said:

Don't forget that Fonterra was caught up in the baby formula scandal a few years ago. The Chinese were adding melamine to the milk powder to fool protein quantity tests. In that case the Chinese executed the plant manager and his quality control manager.

I didn't know Fontera was involved in that..  But that baby formula scandal was worldwide news..  and is the single largest reason why people worldwide would NEVER want "milk from China" and why even so many Chinese  buy imported milk.  I just feel that any business producing milk inside China would have an uphill battle caused by perceptions from that baby formula scandal,.  I'd hate to learn that Chinese milk product got into the diet of my kids through some NZ milk products company trying to hide it.  

 

Edited Friday at 06:07 PM by to_dave007

[CardiacKid 2,298]

On 10/16/2020 at 2:05 PM, to_dave007 said:

I'd hate to learn that Chinese milk product got into the diet of my kids through some NZ milk products company trying to hide it.  

 

Fonterra quickly?? announced that they were no longer using Chinese milk powder in their infant formulas. However, no one revealed how long they used Chinese milk powder unaware that it contained melamine. Seems to me a basic analysis of any Chinese foodstuff should be conducted before using.