John Wilson ‘champion guy’

John Wilson’s ties with Fonterra covered the lifetime of the cooperative – from its creation in 2001 when he became head of the Shareholders’ Council through to board chairman up to last year.

Wilson died late last month at the age of 54, from an undisclosed illness, having stepped down from the board last year after a health scare.

When he was elected chairman in 2012, he had been a director for nine years, working behind the scenes on key policies such as milk pricing.

The six-year term at the top of the boardroom table for the Massey-educated dairy farmer coincided with the arrival of Dutch chief executive Theo Spierings; together they were the public face of New Zealand’s largest company with a turnover last year of $20.2 billion.

It was a period marked by the adoption of the ‘‘velocity’’ strategy, designed to add value to the flood of milk coming on stream and make a shift from being a lesser earning commodity business.

Yet at the same time Wilson did not apologise for Fonterra’s dependence on earnings from commodities – chiefly milk powder which makes up 83 per cent of exports.

‘‘Commodities might not be fashionable, but they are the foundations of our economy with dairying,’’ he said.

So along with the investments in plants producing cheese and butter sliced in sheets specially designed for creating croissants, there were run-of-the-mill milk driers.

Among the investments were: A $230 million drier at Pahiatua to process 140,000 tonnes of milk powder a year

A $240m cheese factory in Clandeboye, South Canterbury, where milk is converted into mozzarella in less than a day

$150m earmarked for cream cheese plants in Canterbury

A $120m UHT processing plant at Waitoa in Waikato.

This was just some of the expenditure in stainless steel in New Zealand. But Fonterra is a multinational, with investments in Australia, South America, Asia and Europe.

In 2015 it commissioned a new dairy ingredients plant in the Netherlands, in a partnership worth $144m, with the Dutch cheese manufacturer A-ware Food Group.

Plans for a $165m expansion were announced by Fonterra Australia in 2017, with the lion’s share directed at doubling the capacity of its Victoria cheese factory.

Still in expansion mode in 2017, it made a bid for troubled Australian co-operative Murray Goulbourn, but failed in the face of an offer by Canadian company Saputo who paid A$1.3b.

China proved to be both a winner and loser during Wilson’s reign.

On the one hand the Anchor brand is now the top-selling in both stores and through e-commerce. Between 2013 and 2018, Fonterra’s business in China jumped from $1b to $5b in turnover.

Fonterra is a major player in the China market: it makes up 11 per cent of the country’s total dairy consumption, accounts for 36 per cent of dairy imports and 26 per cent of the dairy giant’s output goes into China.

But on the debit side, its $750m investment for an 18 per cent stake in Chinese company Beingmate has turned sour, forcing it to write down $439m off its books, and contributing towards the first loss in its history of $196m last year.

Wilson was an enthusiastic promoter of the Chinese farms it owns: two hubs with 28,000 cows near Beijing, with plans for a third hub.

However analyst Keith Woodford estimates the farms have been loss-making ‘‘for at least four years.

Accumulated losses over that period, using market prices rather than internal transfer prices, total $179m’’.

Under new chairman John Monaghan and chief executive Miles Hurrell, that expansionist strategy is under review. Already they have announced moves to divest assets such as Tip Top.

They are unwinding the Darnum, Australia joint venture with Beingmate.

The partners have agreed that Fonterra will regain full ownership of the plant, which produces nutritional powders for domestic and global markets.

Monaghan described Wilson as a man whose dedication and commitment to Fonterra ran deep.

‘‘John always brought dedication, commitment, and deep dairy knowledge to each of the representation and governance roles in which he served.

‘‘On behalf of his fellow farmers he was the ultimate advocate for what we stand for.’’