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Home / The Country / Listen

What Fonterra's Strategy for 2030 means for its AMENA business

The Country
14 Oct, 2021 08:00 PM3 mins to read

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File photo / John Stone

File photo / John Stone

Content brought to you by Fonterra

Fonterra's Strategy for 2030 has a lot of exciting aspects for the co-op's AMENA business, which covers Africa, the Middle East, Europe, North Asia and the Americas.

Fonterra's AMENA CEO, Kevin Wickham was particularly interested in the Strategy's focus on investment in Research & Development.

The R&D investment supported Fonterra's Active Living business, which was a strategic focus of AMENA, Wickham told The Country Sport Breakfast's Brian Kelly.

"It's where we're looking to support adults live healthier, more fulfilling, longer lives. People want to be active for longer."

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Consumers were turning to nutrition to achieve this and milk had many properties, including essential amino acids, vitamins and minerals, that could help them live healthier lives, Wickham said.

Fonterra aims to increase its R&D spend by 50 per cent over the next 10 years to $160 million per annum in 2030.

"This is so we can help bring more solutions to our customers, particularly in the lead market of the Americas, Europe and North Asia - then role it out to the wider group."

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About $60 million per annum is specifically targeted at growth in Active Living, to help Fonterra tackle the methane challenge and develop new innovative products to support its value growth plans.

Meanwhile, a continued focus on New Zealand milk means Fonterra has decided to start the process to divest its integrated business in Chile.

The operations in Chile didn't require any New Zealand-sourced milk or expertise, Wickham said.

"It's business as usual for that team for now, but we will start to look at that divestment process."

Fonterra will still continue its global partnerships with businesses that support its strategy, such as companies that supply special components of milk for its higher-value ingredients, including those in the Active Living business.

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"For example - we have a whey protein factory here in the Netherlands. We source the whey from a cheese partnership next door and we make that whey into high-value protein ingredients for our Active Living customers."

More markets in the AMENA region, including Europe, the US and Japan, are interested in sustainability.

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As a result, Fonterra is investing $1 billion in sustainability over the next decade.

The drive for sustainable products was consumer-led, Wickham said.

"Consumers are asking where is food coming from, where is it made and what's the environmental impact of that."

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That's why it was important Fonterra continued to support the hard work farmers had been doing to reduce the environmental impact of their business, especially since New Zealand dairy was a world leader in reducing on-farm greenhouse gas emissions, Wickham said.

"So a strong starting point, but we have to continue to work on that."

Also in today's interview: Wickham talked about enjoying summer in the Netherlands after many months of lockdown and his recent visit to Fonterra's Middle East team in Dubai.

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