Yesterday is a very important day at world dairy industry.
Fonterra group announced to step change their business strategy to only B2B ingredient business, and then
within next year, Fonterra will abandon their consumer business(B2C) and will sell almost brand business these was inheritance from NZMP when "Dairy Group" merged with NZMP of "Dairy Board" to build the huge business of Fonterra.
Sadly, at the meantime, Fonterra also decide to sell their business at Oceania & Sri Lanka, because their need to pay the debt of Wall Street it was borrowed for build a Global business to support Fonterra start.
The matter was happened just as my previous boss at North Asia Region, a good humor sense New Yorker, said “They (Dairy Group) have an helicopter view." - He is totally correct! I think at this moment, Fonterra managing team is eventually recognized what is it means.
I copy this news to my old friend of NZMP before and I got a simple reply of "Why they do not sell Dairy Group?".
Good question! This is really a black humor within a little dissatisfaction.
"May be next year?"(laugh)
Under the official announcement, I know the manufacturing factory of NZMP (Currently belong to Fonterra Group) got a huge extension after Fonterra be there. But the consumer business is not growth as their plan. So currently, Fonterra is facing the situation of making choice of Break or Sell itself.
Even if selling, Fonterra's factory is seeming not a benefit asset, because it will be coming with the debt.
My question is Who will buy it?
China? Certainly!
China is already bought the secondary Dairy industry in west land of NZ, there is really interesting to buy Fonterra. But the question is how Fonterra to persuade Chinese to buy their milk?
"To B or not to B, that is the question! - Fonterra tried their effort, but failure.", Chinese news report this event with such a title.
If so, thing looks no so happy for NZ Dairy and NZ government. I can certainly say that Politician will solicit government to stop China buying. So, the only choice left for NZ people is to buy NZMP by Tax of Nation. This is meaning Nation will take over Fonterra's debt, within, a big part of debt was paid to Fonterra’s executive & managing compensation as a bonus. It really makes people to angry in GLOBAL !
The real purpose of that Fonterra (NZ Dairy guys.) Plan to sell NZMP to Government after 16 years of them merged NZMP of NZDB.
But now. the Dairy Export Exclusive Law is not existed. This law was ablated by angry farmers of Dairy Group, because they think the NZDB have too much benefit from this law and do not agree the fact is this law protected farmers in the country.
Now, the Dairy Group is facing to challenge with Chinese Dairy Group at NZ. It seems nothing can stop China to development their dairy industry in NZ, because barricade in the county is not exist now.
Fonterra CEO also speech after the announcement. He said "Give the consumer business to PROFESIONAL people. The best way for Farmer is make milk."
It sounds a "Declaration of defeat of Fonterra". Yes, we must give farmers a chance to not sell itself at next year.
Fonterra got global supply chain on system support milk collection; Fonterra got sales force on system for every sites it was supported by a global outsourcing infrastructure. Fonterra win the cyber, but lost world.
These systems just like "game center (such descripted by my staff when him retired before Fonterra)", it enjoys farmer's to spent their relaxing time after milking cow.
No future is the future of Fonterra! Because they hurt almost professional people whose were serviced to New Zealand dairy industry for long years.
by Fukuendo
#Some old friends in South Asian Region mentiond me about “Confused with NZMP and "New Zealand Milk Products" in this blog". He is correct, but the case he said is only limited in NZ domestic.
At oversea sites of Fonterra, for example, Fonterra Japan. this company is starting from New Zealand Milk Products Japan (I was joining this company at that time),the main sales values of "New Zealand Milk Products Japan" are Cheese etc. brand business.
But it merged other milk ingredient business in Japan it was run by joint ventured with Nissei Kyoueki.
Some ingrident is come from NZ Dairy Group.
The new company NZMPJ be set under NZMP of NZDB by the reason of "Dairy Export Exclusive Law". Bland business is Sales dep.1 and ingredient business (JV) is sales dept.2. Actually, NZMPJ is "New Zealand Milik Products Japan". Brend business volume is NZMPJ is about 36bili JPY at that time
After move to Fonterra Japan. The global IT team deleted all local systems include NZMPJ homepage & portal site, a totally paperless enveriment, a printing delivery forms system, whole DM systems with every business depatment. So you can not found local company data in public site. you can only see whole Fonterra Group sales data. My speculation to Fonterra Japan's annually sales amount is about 50bili JPY~60bili JPY recently.
So even if, it is call NZMPj or Fonterra Japan, it will face to break to 2 parts and sold out 1 it is main business of oversea site. I remember when I leave NZMPJ, the manager of sales dept.2 asks me a question at smoking room. he said "We are milk trading company. Do you like NZMPJ be form to an agent of NZ". This is a heavy question; I cannot reply at that moment.
(May people question why NZMPJ's manager class like to discuss business with an IT manager privately? I think you could to ask President Mattew Foster, the timing of NZMPJ is so nostalgic in my life. But when Fonterra start, almost new comer managers, if not be a strange, must be a ghost.
OK, I take a look at Fonterra Japan' Join Venture "Nessei Kyoueki", is wrote Abou 35bili sales amount a year recent years. I believe the most sales amount is come from JV, the sale to Azjinomoto is also via Fonterra Japan.
How about the JV next year? What will happen?
I think it is time to say Sayonara to Nessei Kyoueki, because:
1.Nessei Kyoueki have no capability to buy Fonterra's brand business. What their can do it to change co-operation partner after Fonterra sell New Zealand Milk.
2.Nesse Kyoueki is not necessary again for Fonterra(will exist next year) to sell ingredient. Fonterra will direct to ship milk ingredient to Japan's milk factory. It will eventually become a sales agent of Fonterra in Japan.
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