Fonterra today announced its plans to lift performance.

Chief executive Miles Hurrell said the new direction for the co-op meant taking stock of the business, getting the basics right, dropping its volume-based ambition, living within its means, delivering a respectable return on capital and ensuring more realistic forecasting.

Hurrell told The Country's Jamie Mackay there was confusion over the value versus volume ambition and he hoped today's announcement would clarify the situation.

"There were views out there that it was a volume-based ambition ... I still argue that it is a value-based [ambition] but it left room for confusion [which] I guess is the point. So removing that ambition leaves no room for confusion within our teams and so when they go in after something, it's got to have the value lens first and foremost."


Listen below:

Mackay asks if Fonterra is guilty of focusing on overseas issues and dropping the ball back home as a result.

"We've got staff that focus on both things at home and those offshore. We are a complex business, we are a large scale operation and you could argue there's been a bit too much focus in certain areas."

However, Hurrell is quick to point out the importance of Fonterra's overseas endeavours.

"We've got to continue to have partnerships in the offshore environment if we want to make sure that we're our customers' partner of choice ... but I want to make sure that when we do go in an offshore environment ... that it's with a value lens, not just going in there for volume's sake."

Fonterra intends to "maximise New Zealand milk," which Hurrell explains means respecting the capital that its farmers have put forward, as well at the pasture-based systems and animal welfare standards which combine to create a "really great product."

"Don't lose sight of the good product we have here in New Zealand."

Also in today's interview: Hurrell talks about how Fonterra will live within its means and how the co-op intends to deliver a respectable return on capital.