New Zealand-Dairy boss speaks out.
NEW ZEALAND-DAIRY CHEIF SPEAKS OUT.
FONTERRA chief executive Andrew Ferrier reassured dairy farmers that the co-op was in good shape to weather the current economic downturn.
Mr Ferrier spoke to dairy farmers at the Large Herds Conference in Ashburton earlier this month and said the key to the co-op’s success was strong customer relationships and the ability to add value above the relationships.
"In tough times it is good to be in the food industry and here in New Zealand having a strong agricultural base is good."
The biggest food companies in the world, including Nestle and Kraft, were calling for growth in 2009, he said.
Fonterra was keeping a tight reign on every drop of cash, had reduced operating expenses, and had reduced capital expenditure on anything that wasn’t essential.
He understood that times were tough for dairy farmers and said Fonterra was doing all it could to "get every last penny into the payout this year."
He said the world reduction in dairy prices finally seemed to be at an end but the market was still classed as ’choppy’ because of volatility caused by excess dairy product being dumped on the world market.
When the United States dumped five per cent of their excess it had a huge impact on the world market. He said they knew how to sell but not how to market their products and the volatility would not end until the World Trade Organisation decided on trade reform to open the world dairy market.
He said the co-op was also well placed to take advantage of the downturn when the time came.
Mr Ferrier signed off saying he was enthusiastic about the future. The payout was secure where it stood and global relationships could not be stronger.
He said they would continue to be wary of potential competitors, but in spite of the competition that would grow out of the US, China, and developing markets, New Zealand had a head start. He said New Zealand is already "very good at what it does".
"It’s crazy times, but we couldn’t be more enthusiastic with where we are in dairying."
