Fonterra Cooperative Group won't be changing its ownership structure, but is keen on bringing on partners to fund future projects, says director Scott St John.

The Auckland-based company's capital structure has been criticised as making it too hard to raise equity and led to a poor track record of adding value from investments, with one of its harshest critiques coming from First NZ Capital analyst Arie Dekker.

Units in the Fonterra Shareholders' Fund, which gives investors exposure to the cooperative's earnings stream, fell to a three-year low last week after the dairy company's board trimmed its forecast payout to farmers and said it probably won't pay a final dividend.

Fonterra director St John, a former chief executive of FNZC, put forward the dairy company's case to the New Zealand Shareholders' Association annual meeting in Auckland today, saying the payout cut was a tough decision, but "the right call to make" and one he would do again.


He gave a potted history of the 17-year-old company, saying its growing expansion in China and successful development of higher value food ingredients products showed it had been successful.

Still, he accepted some of the challenges facing the company had got "the better of us".

St John didn't agree with a question from the floor that Fonterra's 10,500 farmer-shareholders were reluctant to be fully shared up, and said changing the ownership structure "is just not on the table".

He did, however, say the company needs "to think carefully and innovatively how we fund the projects we enter into."

St John said the recent Indian joint venture with Future Consumer Ltd to produce consumer and food service producers was "probably more likely to be the sort of thing you see us doing."

The Fonterra director was among a line-up of speakers including Finance Minister Grant Robertson, Westpac New Zealand chief economist Dominick Stephens, SkyCity Entertainment Group chief executive Graeme Stephens and Sanford CEO Volker Kuntsch.