Fonterra dismisses new call to quit glossy Auckland HQ for greener pastures

No chance of Fonterra HQ heading south to Waikato dairying heartland. Photo / File

A call from the Waikato Chamber of Commerce for Fonterra HQ to quit Auckland's waterfront for the dairying heartland is a lost cause - but it might come as a surprise just how many Fonterra office staff are already there.

Chamber chief executive Don Good, in his latest commentary on Waikato Inc matters, suggested that instead of Hamilton residents going to work in Auckland on the controversial new $100 million taxpayer and ratepayer-funded Te Huia commuter train, companies should be relocating to the Waikato.

"That would create a substantial lift to the GDP of the Waikato ... number one on that list should be Fonterra."

Why New Zealand's biggest business, a dairy cooperative, has its HQ "on the Viaduct" in downtown Auckland "beats most people, including their farmer shareholders", wrote Good.

Citing Hamilton's new office building boom, the impending opening of the Hamilton section of the Waikato Expressway and other arterial routes in the greater region, Good suggests commuting for Fonterra staff would "be a doddle" when compared to Auckland gridlock.

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"As a cornerstone of Peter McBride (Fonterra chairman) and Miles Hurrell's (CEO) campaign to reconnect Fonterra with its stakeholders, Fonterra needs to come back home to the Waikato and have its senior team live, work and play alongside its stakeholders, to really understand and connect with them."

Fonterra was unmoved by his argument.

In a statement to the Herald, the world's sixth biggest dairy company by revenue said "we have no plans to move our Auckland-based people to the Waikato".

The company said its presence in the Waikato was "already significant" with 1049 staff in its two Hamilton offices - compared to 1221 in the Auckland office.

The company said it employed around 10,000 people in New Zealand across regional communities.

"We have 29 manufacturing sites across the country and five offices - including two in Hamilton, with the others in Christchurch, Wellington and Auckland.

"All our workplaces serve the role of connecting our people who are based in the area with each other, customers and stakeholders," Fonterra said.

The chamber's not the first to lobby for Fonterra to get back to its rural roots.

Formed in 2001 from a mega-merger of regional dairy companies and the single-desk exporter Dairy Board, Fonterra soon after setup HQ on a modest property at Auckland airport, citing the need to be accessible for offshore export customers and its leaders' regular travels to overseas markets.

In 2016 the company raised shareholder eyebrows when it consolidated office staff in a sleek, imposing multi-storey leased building in downtown Auckland's Fanshawe St, the interior specially designed to suit its requirements.

There it has remained, deflecting sporadic mutinous calls from some farmer-owners to lose the glossy Auckland city image and relocate to grassroots.

The calls tend to spike when Fonterra's financial performance falters - such as in 2018 and 2019 when it posted historic heavy losses, which wiped $4 billion off farmer-shareholder balance sheets. The loss in 2018 was $190m and in the following financial year $605m, mostly due to asset writedowns of $826m and its China investments.

Under a new chief executive and a refreshed board of directors, the company has since reset its business strategy and the balance sheet is recovering.

In the pandemic the Fanshawe St building has been echoing, say sources.

Fonterra did not answer the Herald's questions about how fully it is utilised by staff these days - or much longer the company is locked into the lease on the building.