29 Sep 2014

Fonterra poor at value-adding - report

6:49 am on 29 September 2014

The world's biggest milk processors have been ranked in a new report, and while Fonterra is near the top in terms of the volume of milk it collects, it sits near the bottom in terms of the value it creates from that milk.

The International Farm Comparison Network's (IFCN) 2014 dairy company survey ranks the 20 largest milk processors.

The IFCN report shows Fonterra collects 22 million tonnes of milk, sitting second to the Dairy Farmers of America which collects about 27.8 million tonnes.

In third and fourth places respectively are French-owned Lactalis Group and Switzerland's Nestle which both collect about 15 million tonnes.

But in terms of capturing value from its milk Fonterra sits close to the bottom of the table - turning over US 70 cents for each kilo of milk it collects.

Danone turns over $1.90 per kilo, Nestle $1.25, while China's Yili Group turns over $1.60.

However, the IFCN warned that while its turn-over figure gave an indication of the value created it said it was difficult to directly compare companies, and the figure should be treated with care.

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