NZ Herald
  • Home
  • Latest news
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather forecasts

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
    • The Great NZ Road Trip
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
    • Cooking the Books
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • What the Actual
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business

Fonterra eyes India potential

By Rebecca Howard
BusinessDesk·
23 Oct, 2018 02:30 AM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Photo / File

Photo / File

Fonterra says India remains a massive opportunity for the New Zealand cooperative once it inevitably shifts to being a dairy importer.

India is currently balanced in terms of supply and demand, said Teh-han Chow, who heads up Fonterra's ingredients business into China and South and East Asia.

"As it continues to grow and production doesn't keep pace there will eventually be a need for dairy imports into India. The question mark is when," Teh-han told BusinessDesk at the NZX Global Dairy Seminar in Singapore last week.

"That's the million dollar question."

India's spending on consumption will rise to around US$4 trillion by 2025 according to different estimates and its normal year-on-year expenditure growth is already double the global average, he said.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

"The numbers are huge. The country is huge. It is quite a large opportunity."

While India doesn't currently need to import dairy, Teh-han said consumers are actively seeking protein, due to religious and dietary restrictions, and "dairy protein is a good alternative".

Fonterra doesn't export ingredients such whole milk powder to India. Rather demand is driven by products like whey, frequently used in place of eggs.

Advertisement
Advertise with NZME.

According to Teh-han, all signs indicate growing demand across developing Asian economies that represent about 30 percent of Fonterra's total business. That includes not only India but also China.

"We are seeing good, solid demand. We continue to see growth in most of our markets."

The US-China trade war did create headwinds, he said. Higher input prices may affect Chinese milk production as imported US feed gets hit by tariffs.

"Trade wars are never good. My own personal view is that in the end, it is the consumer who pays for the trade war."

Discover more

Small Business

Govt urged to give small business a tax cut with costs piling up

23 Oct 06:30 AM
Employment

Scaffolding collapse injuries: Engineers avoid prosecution

23 Oct 03:51 AM
Business

China-US ties sinking further

24 Oct 12:55 AM

The impact on Fonterra, meanwhile, is two-fold.

On one hand, it puts Fonterra at an advantage as certain US products lose their competitiveness.

"That means we sell more and find other customers that were buying US product who can now buy New Zealand products."

However, "US product that was going into China now needs to go somewhere else.That comes into South East Asia, where we see a much more competitive market. At the end of the day, it is not good for the consumer."

Overall, Teh-han said urbanisation, a young, growing middle class, digitisation and globalisation are the four major trends spurring demand in the 23 markets he covers.

China alone sees roughly 13 million people move to urban locations each year.

Advertisement
Advertise with NZME.

"As you move up the ladder, you have a greater affinity for dairy products," he said. Also, "the demographics are great. We have young populations across most of Asia that are willing to take on new products."

Teh-han pointed to cheese as a key example. Consumption is growing at double-digit rates, largely driven by products merging eastern and western tastes, such as cream cheese in coffee or cheese-flavoured yoghurt.

"A lot of the signals are quite positive and New Zealand is just really well placed," given its clean, green image, Teh-han said.

That demand will eventually outstrip New Zealand's ability to keep up, Teh-han said.

Production in New Zealand will be "flat or slightly increasing" over the longer term.
In the short term, he sees a similar pattern across all the major dairy exporting regions, with a modest lift this year.

"The net exportable surplus of milk will be roughly constant, so we will be in a relatively well-balanced supply and demand scenario."

Advertisement
Advertise with NZME.

However, "global consumption is growing at a much faster pace than that."

China will likely see domestic milk collection increase by around 1.7 percent but it will continue to see 4.4 percent in dairy import growth. "Generally, consumption will continue to increase at a healthy rate."

"We see protein growth as something that consumers are taking on," in particular in the health and wellness space, Teh-han said. As a result, Fonterra is seeking protein beyond its New Zealand milk pools.

The New Zealand dairy company is also examining blended milk powders that are cheaper than the base commodity whole milk powder. Those alternatives offer a more affordable price point for consumers in developing countries or where income levels are low, Teh-han said.

"That expands it. You take a given amount of milk and you can actually expand the amount of product you are able to supply to consumers."

Within China, Fonterra uses fresh milk to supply small stores that guarantee next-hour delivery as digitisation takes on increasing importance, he said.

Advertisement
Advertise with NZME.

Fonterra is in the process of taking stock of its business, prioritising a return on capital and aiming to set realistic forecasts as it looks to turn the business around after a disappointing full-year loss. It has embarked on a process to re-evaluate all investments, major assets and partnerships to ensure they still meet the cooperative's needs.

It is expected to update shareholders at the firm's annual meeting on Nov. 8.

Save

    Share this article

Latest from Business

Premium
Shares

Market close: NZ sharemarket rises as gentailers make gains

09 May 06:03 AM
Premium
Media Insider

Noise ban, off-limit interviews: TVNZ's rules as RNZ moves in; Ad agencies take aim at global merger

09 May 05:43 AM
Premium
Media Insider

'Very happy': Jim Grenon to join NZME board with Steven Joyce in peace deal that ends bitter battle

09 May 05:42 AM

“Not an invisible footprint”: Why technology supply chains need optimising

sponsored
Advertisement
Advertise with NZME.

Latest from Business

Premium
Market close: NZ sharemarket rises as gentailers make gains

Market close: NZ sharemarket rises as gentailers make gains

09 May 06:03 AM

The NZ sharemarket rose strongly today as gentailers made gains across the board.

Premium
Noise ban, off-limit interviews: TVNZ's rules as RNZ moves in; Ad agencies take aim at global merger

Noise ban, off-limit interviews: TVNZ's rules as RNZ moves in; Ad agencies take aim at global merger

09 May 05:43 AM
Premium
'Very happy': Jim Grenon to join NZME board with Steven Joyce in peace deal that ends bitter battle

'Very happy': Jim Grenon to join NZME board with Steven Joyce in peace deal that ends bitter battle

09 May 05:42 AM
Butter prices: Here’s how much they  might still rise

Butter prices: Here’s how much they might still rise

09 May 05:03 AM
Deposit scheme reduces risk, boosts trust – General Finance
sponsored

Deposit scheme reduces risk, boosts trust – General Finance

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • What the Actual
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven CarGuide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP