Miles Hurrell: Fonterra Chief Executive relieved to see farmers backing Lactalis sale

The boss of Fonterra is relieved to see so many farmers back the Lactalis sale.

Almost 90-percent of votes backed the 4.2 billion dollar deal, that will see the French dairy giant take over iconic Kiwi brands like Anchor and Mainland.

Miles Hurrell says some farmers were unsure about the plan when it was first announced.

The chief executive told Mike Hosking that they've been working hard to change minds.

Hurrell says there was a few questions out there from farmer-shareholders, which isn't surprising given they have a lot invested in the company.

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Episode Transcript

Speaker 1 (00:00):
So it wasn't even close. Eighty eight percent if on
terror shareholders, as you'll be well aware by now, said
yes please to the four point two billion dollars sale.
Miles Hurrale is the CEO, of course, and as we
us morning, good morning. Mine sense of satisfaction, oh very much.

Speaker 2 (00:13):
So you know, as you say, eighty eight percent, eight
eight and a half percent is a pretty good turnout
from out from a Shielders that gave us the thumbs
up and endorsement that were heading in the right direction.

Speaker 1 (00:22):
The road shows that you did. Was it always eighty
eight percent or did you have to work hard?

Speaker 2 (00:27):
Oh? No, we had to work hard. I mean, if
I go back to when the announcement was first made,
you know, there's a few questions out there you'd expect
from from a Farmer's Shielders. They had a lot invested
in this company, and so you know we needed fifty percent,
but we came out really clearly and said, you know,
fifty per cent it's not good enough for us. We
were a decent mandate, which we got.

Speaker 1 (00:43):
Where does this set as part of the overall turnaround story?

Speaker 2 (00:49):
Oh? Look, I mean this was a part of our
early thinking. But I think I've said to you before.
I mean, the conversation around whether we should be in
consumer's been on our agenda for call it twenty years,
if I'm honest, And so it wasn't part of our
turnaround store where we were well and truly through that,
you know, inherit to this business in twenty eighteen and
we needed a bit of work and I think we've
got ourselves in a pretty good space. But what we're

(01:09):
into now is actually having choice and I think that's
so much important point that we're seeing right now.

Speaker 1 (01:13):
A couple of questions that people have come through this morning.
When does the when's the money hit the bank account?

Speaker 2 (01:20):
Yeah? So this was an important milestone use today, but
we've still got some gritory hurdles and only yus so
we've got another Middle Eastern country gave us the thumbs up,
so that those will drip through of the next sort
of two or three months I think, so hoping sort
of early part to halfway through next year.

Speaker 1 (01:34):
Okay, and what do you do with your bit of
the money?

Speaker 2 (01:37):
Yeah, so we talked about between four point two sale,
three point two back to back to your shield? Is
that called it a billion? There's obviously he could a
lot of costs. It will go and as well through
this proces of the bank, because I'll put their hand
out these to expect. So call that seven hundred old million.
We've already announced the sort of a number of new
initiatives around a new butter capacity last week. We've got
a high protein factory in South Canterbury that we're investing in.

(02:01):
So you'll see a lot more of those sort of
investments come through, but very much centered around the New
Zealand milk, your advanced ingredients and a food service business.

Speaker 1 (02:08):
Good right, bigger picture auctions. They worry at the moment.

Speaker 2 (02:12):
I wouldn't say I worry, but you know, you've seen
a bit of sentiment change in the international market, and
you know what we've we've been quite lucky. I'd go
as far as to say that the tariffs out of
the US haven't really hit us, and they haven't hit
us directly despite it being fifteen percent as we all know.
But what you see now is, you know, a whole
lot of you know soy that that currently would may
go into China not really happening. Therefore, we've seen a

(02:35):
bit of you know, the supply demand balance between sort
of some of those northern hemispheres sort of be interrupted,
and so you've seen the sentiment play out where buyers
are sitting on their hands a little bit. So that
that's played out, but it was still comfortable ten dollars
to help somewhat by a low New Zealand dollar. I'd
say somebo need to watch that, of course.

Speaker 1 (02:52):
All right, nice, all right, nice to talk to you,
appreciate it. You have a good week in Miles Hurrell,
who's the voluteer of CEO. For more from the Mike
Hosking Breakfast, listen live to news Talks at B from
six am weekdays, or follow the podcast on iHeartRadio