The Country
  • The Country home
  • Latest news
  • Audio & podcasts
  • Opinion
  • Dairy farming
  • Sheep & beef farming
  • Rural business
  • Rural technology
  • Rural life
  • Listen on iHeart radio

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • Coast & Country News
  • Opinion
  • Dairy farming
  • Sheep & beef farming
  • Horticulture
  • Animal health
  • Rural business
  • Rural technology
  • Rural life

Media

  • Podcasts
  • Video

Weather

  • Kaitaia
  • Whāngarei
  • Dargaville
  • Auckland
  • Thames
  • Tauranga
  • Hamilton
  • Whakatāne
  • Rotorua
  • Tokoroa
  • Te Kuiti
  • Taumurunui
  • 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

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • 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 / The Country

New Fonterra chief wary of volatility

Owen Hembry
By Owen Hembry
Online Business Editor·NZ Herald·
28 Sep, 2011 04:30 PM4 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

Theo Spierings, who took over at Fonterra this week, says the company is the envy of the dairy world. Photo / Dean Purcell

Theo Spierings, who took over at Fonterra this week, says the company is the envy of the dairy world. Photo / Dean Purcell

International dairy prices could fall if the West slips into another recession but the long-term prognosis for the sector is good, says Theo Spierings, new chief executive at dairy co-operative Fonterra.

"When you look [out to] 2020, long-term perspective, demand in the world is going to outpace supply so in that sense long-term I don't see a big issue in dairy and also not for prices in dairy," Spierings said in his first media appearance yesterday.

"But short-term if the West goes into a recession again ... it could be a huge emotional reaction with people not spending.

"So there is volatility in the market and the volatility will increase if more is going to happen in Europe and United States," he said.

"Some people are saying already that we are on the edge, or even over the edge, so we have to take it seriously."

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

Spierings, who took over at Fonterra this week, was acting chief executive of Royal Friesland Foods and in 2008 led that company into a merger with Campina, creating Royal FrieslandCampina - the world's fifth biggest milk processor.

Dairy demand would grow by 160 billion litres by 2020, with New Zealand's supply expected to rise by 5 billion litres - 3 per cent of the total, Spierings said.

"I do believe that the co-ops in the world are very well placed because they have the ability to control the whole chain.

Advertisement
Advertise with NZME.

"We are in the good position that our shareholders supply capital but also supply milk," he said.

"I do see potential for Fonterra to use the integrated business model in other areas of the world linked to other milk pools."

Fonterra last week posted revenue for the year ended July 31 up 19 per cent at $19.9 billion.

Profit was up 13 per cent at $771 million.

Discover more

Agribusiness

Fonterra chief leaves at top of his game

20 Sep 05:30 PM
Economy

Fonterra pours $10b into economy

21 Sep 10:52 PM
Agribusiness

Bumper Fonterra result comes with a warning

22 Sep 05:30 PM
Opinion

Brian Gaynor: Guiding hand behind dairy's success story

30 Sep 04:30 PM

The company had strong positions in South America, a successful operation in China and business in Southeast Asia and the Middle East, Spierings said.

"I would say these are strongholds and there you have to look [at whether] we can even make it stronger by looking at this integrated model and doing more than what we are doing now."

Fonterra was the envy of the dairy world, Spierings said.

"The whole portfolio, when you look at the chain from the farming model, to milk available, to the integrated model that you can run really from grass to glass, to your customer base but also the location in New Zealand.

"If you put those strengths all together there's a fantastic challenge and opportunity and that's why I call it the envy of the dairy world globally," he said.

The challenge and opportunity was to build another layer of value in the business on its strengths, Spierings said.

Advertisement
Advertise with NZME.

"The vision is a natural source of dairy nutrition for everybody, everywhere, every day," he said.

"That is a very ambitions and strong vision but I do believe that Fonterra can really make New Zealand the dairy nutrition capital of the world ... based on its strength and based on the business it's running at the moment."

Spierings said he was not a "change manager".

"I don't like to come in and say, 'Change', because change means that the people were doing something wrong. I'm more build and grow."

The first 30 days in charge would involve meeting stakeholders and "feeling the pulse of the co-op, farmers, employees and other stakeholders and then translating that into a strategic workshop, a framework ... what do we have on the table, what is the direction, what do we go for and what do we stand for?"

Spierings has arrived at Fonterra with the co-operative planning a change in capital structure aimed at removing redemption risk and providing permanent share capital, with farmers buying and selling shares among themselves rather than with the company.

Advertisement
Advertise with NZME.

Protecting capital and equity, and reducing redemption risk was crucial, Spierings said.

"Because if you don't do that you de-stabilise the co-op and therefore the business," he said

Fonterra Shareholders' Council this month said there had been discussion in some quarters that trading among farmers was a threat to farmer ownership and control.

"Do we need to keep 100 per cent control and ownership with the farmers? Yes, we have to," Spierings said.

"The more stable the co-op and the more you safeguard the strength, the easier it is for management to build another layer of business and value."

THEO SPIERINGS

Advertisement
Advertise with NZME.

New Fonterra chief executive.

Born: The Netherlands in 1964.

Family: Married with three children.

Education: MBA, Glasgow University.

2007: Acting chief executive of Royal Friesland Foods.

2008: Oversaw merger with Campina.

Advertisement
Advertise with NZME.
Save

    Share this article

Latest from The Country

The Country

Vege tips: Winter, time for onions and strawberries

21 Jun 05:00 PM
The Country

The ABCs of wool in 1934

21 Jun 05:00 PM
Opinion

Why NZ needs its own Clarkson's Farm

21 Jun 05:00 PM

Jono and Ben brew up a tea-fuelled adventure in Sri Lanka

sponsored
Advertisement
Advertise with NZME.

Latest from The Country

Vege tips: Winter, time for onions and strawberries

Vege tips: Winter, time for onions and strawberries

21 Jun 05:00 PM

OPINION: Kem Ormond is busy with onion seed trays & preparing the ground for strawberries.

The ABCs of wool in 1934

The ABCs of wool in 1934

21 Jun 05:00 PM
Hill farming and Arabian horse breeding in Taumarunui

Hill farming and Arabian horse breeding in Taumarunui

21 Jun 05:00 PM
Why NZ needs its own Clarkson's Farm

Why NZ needs its own Clarkson's Farm

21 Jun 05:00 PM
Help for those helping hardest-hit
sponsored

Help for those helping hardest-hit

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
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • 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