Fonterra has announced a strategic move to merge its New Zealand (FBNZ) and Australia operations, creating a unified entity named Fonterra Oceania. This announcement, made on 19 February via a New Zealand Exchange filing, marks a significant shift in the dairy co-operative’s approach to the trans-Tasman dairy market. The merger, set to take effect on 1 May, aims to bolster Fonterra’s competitive edge in a challenging marketplace.

Miles Hurrell, Fonterra’s CEO, emphasized the merger’s potential to enhance the company’s offerings across New Zealand and Australia. FBNZ’s popular dairy brands such as Mainland, Anchor, and Kāpiti, known for their milk, butter, specialty cheese, and yogurt, will maintain their New Zealand farmer-sourced milk. Similarly, Fonterra Australia will continue using local milk for its products, including brands like Mainland and Western Star butters.

René Dedoncker, Fonterra Australia’s managing director since 2017, is appointed to helm Fonterra Oceania. Dedoncker’s extensive experience within Fonterra since 2005 positions him as a key leader in this new phase.

Despite a 12% revenue decline in Q1 FY2024, Fonterra reported a gross profit increase of 19.7% and a 45.6% rise in EBIT. Additionally, Fonterra is committed to reducing farm-based emissions by 30% by 2030 from its 2018 levels, showcasing its dedication to sustainability alongside its business innovations.

Summary Points:

  • Fonterra announces the merger of its New Zealand and Australia operations into Fonterra Oceania, effective 1 May.
  • The merger aims to enhance Fonterra’s competitive position in the trans-Tasman dairy market, with a focus on leveraging the complementary aspects of both units.
  • René Dedoncker is appointed to lead Fonterra Oceania, bringing years of leadership within Fonterra to the forefront of this strategic move.
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