Fonterra Group has announced its intention to divest Fonterra Sri Lanka as it changes direction in its strategies to grow long-term value for farmer shareholders and unit holders, the group announced on Thursday (16).

Accordingly, Fonterra Chief Executive Officer (CEO) Miles Hurrell said that Fonterra's strength lies in producing world-class ingredients to sell, such as raw milk, milk powder and cheese which will be its entire focus hereafter.

“We have conducted a strategic review which has reinforced the role of our core business. This is working alongside farmers to collect a sustainable supply of milk and efficiently manufacture products valued by customers, to deliver strong returns to farmer shareholders and unit holders,” said Fonterra Chairperson Peter McBride.  

CEO Miles Hurrell said that the review has also given the co-op confidence in the role it plays in the dairy nutrition value chain, with one of its greatest strengths being the production of world-class, innovative ingredients for customers to take to consumers.

The statement by Fonterra said that it believes it can grow further value for the co-op by focusing on being a B2B dairy nutrition provider, working closely with customers through our high-performing Ingredients and food service channels.

“This will be enabled by strong relationships with farmers, a flexible manufacturing and supply chain footprint, deeper partnerships with strategic ingredients customers, further investment in our food service channel, continued delivery on our sustainability commitments and investment in innovation,” the statement said.

“In this context, we are exploring divestment options for our global Consumer business as well as our integrated businesses Fonterra Oceania and Fonterra Sri Lanka,” said Hurrell.