Fonterra ultimatum forces export drive

By PETER GRIFFIN IT writer

Farming web portal Fencepost.com wants to sell the technology and expertise behind its online services to the rest of the world and has set up a web services arm to do so.

Fencepost will look to sell IT services to overseas buyers on an application service provider (ASP) model, running all operations on Fencepost's existing infrastructure from New Zealand.

Fencepost's expansion comes as the division receives the word from its owner, dairy giant Fonterra, to become profitable or face closure.

Fonterra chief executive Craig Norgate said at Fonterra's annual meeting last month that Fencepost would be expected to tighten its belt, trimming costs by between $2 million and $3 million.

Fencepost chief executive Kris Nygren said those savings had been achieved across the company and that Fencepost was making an "operational profit".

Fencepost's accounts are not reported separately to Fonterra's.

Nygren said Trade New Zealand had assisted Fencepost in making contact with potential dairy industry customers.

The new division would offer consulting services, website hosting, e-business service and supply chain management, trading on the intellectual property it had built up over the past two years building the Fencepost.com portal.

Of Fonterra's 13,000 shareholders, 9000 use Fencepost's services, accessing everything from dairy market reports to stock tendering databases and an online farm store.

Of those users, Nygren said, 6200 accessed the portal "every other day at least".

When milk is picked up from Fonterra farmers, data about its contents is transmitted wirelessly from the milk tankers to Fonterra where it enters a database.

Some of that information is then passed to Fencepost and used to update statistics and graphs on the Fencepost.com portal, where farmers log-in to access their own information.

Fencepost claims farmers' use of the portal saves them money because they can identify quality issues with milk quickly. The productivity tool could potentially save the global dairy industry billions, said Nygren.

The portal operator will not say who it is negotiating with, but expects to secure its first overseas clients in the next two months, most likely starting in Australia.

Fencepost was not looking for dotcom-type growth overseas and had a modest budget from Fonterra to make its global push, said Nygren. Fonterra's position as the fourth biggest dairy conglomerate in the world would rule out Fencepost working with its large competitors.

Fencepost

RD1