August 27, 2024 • 5 mins
The chief executive of Fonterra joins us, to much fanfare and speculation, for the second time within a week. So what's the big news?
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Episode Transcript
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Speaker 1 (00:02):
So here it is the announcement from Fonterra that we've
all been waiting for. You got a call while I
was on the road yesterday. Miles Hurrale, chief executive, wants
to be on the show for a second time within
the space of a week. And when Miles says jump,
we normally say how high Miles? Now? There were a
couple of roomors circulating that you wanted to come on
to move the milk price to nine bucks. I think
(00:23):
we can dismiss that one. The other interesting one was
that you were going to resign and retire to a
yacht on the or a luxury cruising yacht on the Mediterranean.
Is that one true?
Speaker 2 (00:35):
Well, good Jamie, I know neither of those are true,
but of course farmers are even the optimist of course,
so we'll take it. But no, we're announcing today quite
a significant upgrade to a Studdon factory in the South Island,
and it shows you know, we're here to deliver for
our farmers in an advanced and grediing space, as.
Speaker 1 (00:53):
Fate would have it. I was filming a video and
a spud paddock, but it's highly secretive, so I can't
say more. Than that miles yesterday and it was right
there your Clandy Boys site. And because Clandy Boys off
the main drag State Highway one, I'd never had a
look around there, so we took the opportunity to have
a look round. Gee, it's a big site.
Speaker 2 (01:12):
It is a big site. And we've had quite a
significant investment in Clandyboorg the last few years as well,
mainly around and mozzarella cheese. So you know, the role
here for us is to grow our ingredients business, grow
food service business, and today's announcement is right in line
with that.
Speaker 1 (01:28):
Well, going down the road from Clandy Boy, we did
drive past Studham which is on State Highway one. What
are you doing there? How much are you spending?
Speaker 2 (01:37):
Yeah, it's about about seventy five million dollars. Is we're
sort of allowed or peaked for that expansion and it's
about I mean, most of that product that we make
in Studum at the moment is homework powder. But here
we are wanting to expand our a medical and an
active nutrition our course nutrition products and so you know
a significant investment we're announcing today which goes to support
as I say that the evaluate ingredients part of our
(01:59):
business and what is a growing category globally?
Speaker 1 (02:02):
Are you going to use some of the money that
you've got by flagging off the family silverware, or that
you're going to get your consumer brands to pay for
this well, and let.
Speaker 2 (02:11):
Least be honest. I mean, the earnings that we've had
in the last couple of years ago go a long
way to supporting us to continue to grow. So you
know what it is. I mean, we did announce that
we're going to look at our consumer business and put
that on the block, and we're in that process, of course,
but we also said we would also come out in
September and talk about what our strategy is going forward.
But what you've seen here today is this is right
(02:33):
in the wheelhouse. We were going advanced ingredients, food service
and really proud that we can give that factory lift.
Speaker 1 (02:41):
So you're talking about high value proteins. You mentioned the
sports nutrition department, what else is it doing? And medical stuff?
Speaker 2 (02:49):
So medical nutrition, sports nutrition. So this is a category
that's sort of growing about a ten billion dollars a
year category and carr As I say, it's right and
sort of the the crosses of what we're targeting. You know,
high value consumers in both North America, Europe, Japan career
and so you know, it's supporting those categories and putting
(03:11):
our milk into higher returns.
Speaker 1 (03:13):
And I read in your press release that you're expecting
that sector to grow at an annualized rate of seven
percent per anum. That's impressive.
Speaker 2 (03:22):
Well, it is impressive. And so you've seen some categories
and you know, we talked quite a lot about the
infant nutrition category with the growth rates in China coming back,
but we really see growth rates in this category in
our sports active living. You know, people are aging and
they're looking for for more protein, more dairy protein in
the diets, and so you know, it's a good, good
news story for us, so we'll take it.
Speaker 1 (03:43):
It's a beautiful day down south today and the country's
enjoyed some pretty good weather and some mixed weather as
well as you'd expect as we head into the spring.
Of course, how's milk collection volumes going? Early days?
Speaker 2 (03:54):
I know it those early days, but they are up
over this time last year, which I think is a
reflect of pretty good winter, the animal conditions they went
through winter, and so you know, carving's in a good space,
so you know, mil milk is up this time of year.
But as you said, to early days, but we'll keep
our fingers crossed for a decent peak.
Speaker 1 (04:12):
Now. I note that the milk futures market before your
announcement was it like eight dollars eighty en z X
was saying something like nine dollars twenty. How long is
it to you? Still the PR department at Fonterra rings
me up and says we've got to get miles on
to announce nine dollars. When's that likely to happen?
Speaker 2 (04:30):
Well, yeah, we've always said we'll be the first, you'll
be the first to know along with our farmers if
we see a change. So we now set fifty cents
up last week, which which goes a long way to
sort of signal where the markets heading. But again it's
early days, you know, week week three of the financial
years ahead of ourselves.
Speaker 1 (04:45):
There's upside risk surely.
Speaker 2 (04:47):
Well, but also downside. I mean you only have to
look at the international market to see things are a
bit wobbly out there. So you know, for us, as
you know, a realistic number of eight to fifty, but
we'll still got the spread up and down a recognizing
that things you know the way at the stage, Okay.
Speaker 1 (05:01):
Myles Hurrel. Nice to chat to you and nice to
know you're not heading off to the Mediterranean, but you
keep up the good work at Fontira.
Speaker 2 (05:08):
Cheers, cheers, bo
So here it is the announcement from Fonterra that we've
all been waiting for. You got a call while I
was on the road yesterday. Miles Hurrale, chief executive, wants
to be on the show for a second time within
the space of a week. And when Miles says jump,
we normally say how high Miles? Now? There were a
couple of roomors circulating that you wanted to come on
to move the milk price to nine bucks. I think
(00:23):
we can dismiss that one. The other interesting one was
that you were going to resign and retire to a
yacht on the or a luxury cruising yacht on the Mediterranean.
Is that one true?
Speaker 2 (00:35):
Well, good Jamie, I know neither of those are true,
but of course farmers are even the optimist of course,
so we'll take it. But no, we're announcing today quite
a significant upgrade to a Studdon factory in the South Island,
and it shows you know, we're here to deliver for
our farmers in an advanced and grediing space, as.
Speaker 1 (00:53):
Fate would have it. I was filming a video and
a spud paddock, but it's highly secretive, so I can't
say more. Than that miles yesterday and it was right
there your Clandy Boys site. And because Clandy Boys off
the main drag State Highway one, I'd never had a
look around there, so we took the opportunity to have
a look round. Gee, it's a big site.
Speaker 2 (01:12):
It is a big site. And we've had quite a
significant investment in Clandyboorg the last few years as well,
mainly around and mozzarella cheese. So you know, the role
here for us is to grow our ingredients business, grow
food service business, and today's announcement is right in line
with that.
Speaker 1 (01:28):
Well, going down the road from Clandy Boy, we did
drive past Studham which is on State Highway one. What
are you doing there? How much are you spending?
Speaker 2 (01:37):
Yeah, it's about about seventy five million dollars. Is we're
sort of allowed or peaked for that expansion and it's
about I mean, most of that product that we make
in Studum at the moment is homework powder. But here
we are wanting to expand our a medical and an
active nutrition our course nutrition products and so you know
a significant investment we're announcing today which goes to support
as I say that the evaluate ingredients part of our
(01:59):
business and what is a growing category globally?
Speaker 1 (02:02):
Are you going to use some of the money that
you've got by flagging off the family silverware, or that
you're going to get your consumer brands to pay for
this well, and let.
Speaker 2 (02:11):
Least be honest. I mean, the earnings that we've had
in the last couple of years ago go a long
way to supporting us to continue to grow. So you
know what it is. I mean, we did announce that
we're going to look at our consumer business and put
that on the block, and we're in that process, of course,
but we also said we would also come out in
September and talk about what our strategy is going forward.
But what you've seen here today is this is right
(02:33):
in the wheelhouse. We were going advanced ingredients, food service
and really proud that we can give that factory lift.
Speaker 1 (02:41):
So you're talking about high value proteins. You mentioned the
sports nutrition department, what else is it doing? And medical stuff?
Speaker 2 (02:49):
So medical nutrition, sports nutrition. So this is a category
that's sort of growing about a ten billion dollars a
year category and carr As I say, it's right and
sort of the the crosses of what we're targeting. You know,
high value consumers in both North America, Europe, Japan career
and so you know, it's supporting those categories and putting
(03:11):
our milk into higher returns.
Speaker 1 (03:13):
And I read in your press release that you're expecting
that sector to grow at an annualized rate of seven
percent per anum. That's impressive.
Speaker 2 (03:22):
Well, it is impressive. And so you've seen some categories
and you know, we talked quite a lot about the
infant nutrition category with the growth rates in China coming back,
but we really see growth rates in this category in
our sports active living. You know, people are aging and
they're looking for for more protein, more dairy protein in
the diets, and so you know, it's a good, good
news story for us, so we'll take it.
Speaker 1 (03:43):
It's a beautiful day down south today and the country's
enjoyed some pretty good weather and some mixed weather as
well as you'd expect as we head into the spring.
Of course, how's milk collection volumes going? Early days?
Speaker 2 (03:54):
I know it those early days, but they are up
over this time last year, which I think is a
reflect of pretty good winter, the animal conditions they went
through winter, and so you know, carving's in a good space,
so you know, mil milk is up this time of year.
But as you said, to early days, but we'll keep
our fingers crossed for a decent peak.
Speaker 1 (04:12):
Now. I note that the milk futures market before your
announcement was it like eight dollars eighty en z X
was saying something like nine dollars twenty. How long is
it to you? Still the PR department at Fonterra rings
me up and says we've got to get miles on
to announce nine dollars. When's that likely to happen?
Speaker 2 (04:30):
Well, yeah, we've always said we'll be the first, you'll
be the first to know along with our farmers if
we see a change. So we now set fifty cents
up last week, which which goes a long way to
sort of signal where the markets heading. But again it's
early days, you know, week week three of the financial
years ahead of ourselves.
Speaker 1 (04:45):
There's upside risk surely.
Speaker 2 (04:47):
Well, but also downside. I mean you only have to
look at the international market to see things are a
bit wobbly out there. So you know, for us, as
you know, a realistic number of eight to fifty, but
we'll still got the spread up and down a recognizing
that things you know the way at the stage, Okay.
Speaker 1 (05:01):
Myles Hurrel. Nice to chat to you and nice to
know you're not heading off to the Mediterranean, but you
keep up the good work at Fontira.
Speaker 2 (05:08):
Cheers, cheers, bo
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