Fonterra puts China market at ‘top table’

Fonterra Cooperative Group is looking to elevate the importance of China, its leading market, as part of its new strategy.

The cooperative announced plans to bring together the consumer and food service and ingredients businesses into one Greater China business as it presented its annual result last week. Work is under way to recruit a new chief executive for the region.

The businesses have been “operating well but we see an opportunity to elevate the importance of China into the business,” chief executive Miles Hurrell said.

“While it was an important part of our business, it was one layer down,” he said. This move will bring its importance to the “top table”.

Fonterra’s new operating model essentially brings together its two central businesses into three in-market units: Asia Pacific (APAC); Greater China (GC); and Africa, Middle East, Europe, North Asia, and the Americas (AMENA).

Judith Swales will head APAC, while Kelvin Wickham is heading the AMENA division.

In China, the consumer and food services business is currently led by Christina Zhu while the China ingredients business is led by Teh-Han Chow.

Hurrell said the two units will be brought together under one leader and Fonterra was open to a discussion with both about the role. He said, however, the aim wasn’t a full merger.

The fate of the China farms, meanwhile, is still up in the air. Chief financial officer Marc Rivers said there are a range of options including buy, sell and hold. Of those he’d like “the most valuable option”.