The Company
Fonterra was formed in June 2001 by the merger of New Zealand's two largest dairy companies processing farmer-shareholder milk, the New Zealand Dairy Group (NZDG) and Kiwi Co-Operative Dairies (Kiwi). At the same time, deregulation of the dairy industry saw the newly merged entity assuming responsibility for international marketing of its milk and milk products, which was previously undertaken for all producers by the single desk trader the New Zealand Dairy Board.3
The Fonterra Co-Operative Group Limited (Fonterra), co-operatively owned by the 13,000 New Zealand dairy farmers who supply it, is New Zealand's largest company and the fourth largest global dairy company. Exporting 95 percent of its shareholders' production, it is the world's largest exporter of dairy products, and is responsible for one third of international dairy trade across open borders. The company's global supply chain stretches from its shareholders' farms in New Zealand to customers and consumers in 140 countries. From an annual collection of over 13 billion litres of milk, Fonterra manufactures and markets over 1.8 million tonnes of milk products. As the lowest-cost dairy producer in the world, it has established a position as the world leader in large-scale milk procurement, processing and management, and maintains a very strong position as a commodity exporter.4
Fonterra is functionally separated into two divisions:
- Shareholder Services, which deals with all issues relating to the supply of raw milk by shareholder farmers, including collection and delivery of milk to factories, milk payment and shareholder transactions; and
- The supply chain operations engaged in the processing, marketing and distribution of milk products covering both Ingredients and Consumer (NZ Milk) products.
Shareholder Services, based in Auckland, maintains the call centre for shareholders and the shareholder information portal Fencepost.com. The on-line products and services marketplace and distribution portal RD1.com is part of Fonterra Enterprises Production. Marketing and distribution are undertaken in forty-three locations throughout New Zealand and over forty locations worldwide. Corporate headquarters is in Auckland, New Zealand.
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