No sur­prises from Fon­terra

Bush Telegraph - - Focus On Farming -

Fon­terra share­hold­ers have good rea­son to ex­pect a no sur­prises pol­icy and some whip-crack­ing over the fi­nan­cial per­for­mance from new chair­man John Mon­aghan.

Why? Be­cause he said that’s what he ex­pects of New Zealand’s big­gest com­pany — back in 2006 when he was the tough-talk­ing chair­man of its share­hold­ers’ coun­cil and cas­ti­gat­ing Fon­terra for not be­ing more prof­itable.

Back then, he said a “com­pet­i­tive” per­for­mance was just not good enough and that share­hold­ers and the econ­omy ex­pected a “su­pe­rior” in­nings from the near-monopoly dairy jug­ger­naut.

Milk pay­out was $4.10kg milk solids in the 2005-2006 dairy sea­son and re­turns from value-added prod­ucts con­tributed 25c/kg to the pay­out. About 70 per cent of Fon­terra’s farmer own­ers did not make an op­er­at­ing profit that year and the econ­omy was $400 mil­lion short of the pre­vi­ous sea­son’s pay­out de­liv­ery. Mon­aghan said at the time he op­er­ated on “a cul­ture of ab­so­lutely no sur­prises”.

“I don’t have time for those who are not pre­pared to put a view on the ta­ble but then want to talk about it over cof­fee. I ex­pect peo­ple to be to­tally up­front.”

The new chair­man, who suc­ceeds John Wil­son, who an­nounced his res­ig­na­tion re­cently for health rea­sons from the Fon­terra board af­ter two terms as chair­man, said back in 2006 that share­hold­ers were hard taskmas­ters who had high ex­pec­ta­tions for Fon­terra.

“We are in a unique po­si­tion as share­hold­ers. We sup­ply the raw prod­ucts but we also sup­ply the cap­i­tal, so we have a real vested in­ter­ested in this co-op­er­a­tive per­form­ing. For many farm­ers this is their only in­vest­ment,” Mr Mon­aghan told the NZ Her­ald just five years af­ter Fon­terra had been cre­ated to be a na­tional cham­pion from a con­tro­ver­sial in­dus­try su­per­me­rger un­der spe­cial en­abling leg­is­la­tion.

Fast for­ward to 2018 and Mon­aghan is tak­ing the helm of a com­pany un­der fire from its share­hold­ers and the Bee­hive for cap­i­tal losses be­lieved to top $1 bil­lion through its China in­vest­ment strat­egy, its debt level and weak div­i­dends.

Mon­aghan, an Eketa¯ huna farmer with dairy­ing in­ter­ests in the South Is­land, has yet to speak pub­licly since his se­lec­tion was an­nounced last week.

In 2006 he said if he had a blood test he was con­fi­dent it would “re­turn pos­i­tive for dairy pol­i­tics”.

His late fa­ther Jack chaired at least five dairy co-op­er­a­tives in the Wairarapa when dozens of dairy com­pa­nies were sprin­kled around the coun­try.

“I was de­lighted to learn that John Mon­aghan had been ap­pointed to the role of chair­man of Fon­terra,” said Kieran McAn­ulty, Labour Party List MP in Wairarapa and Ju­nior Gov­ern­ment Whip.

“It is just mar­vel­lous that a true Eketa¯ huna man is at the helm of one of our most im­por­tant com­pa­nies. On a per­sonal note, I’m pretty stoked to see a cousin of mine achieve such a feat. I look for­ward to work­ing with John as an MP based in the Wairarapa elec­torate, in my role on the Pri­mary Pro­duc­tion Se­lect Com­mit­tee and Chair of the Labour Party’s ru­ral cau­cus.

NEW Fon­terra chair­man John Mon­aghan from Eketa¯ huna.

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