Fonterra revises strategy to prioritise B2B dairy nutrition

Fonterra has unveiled a revised strategy aimed at enhancing value for its farmer shareholders and unit holders.

The co-operative will prioritise its high-performing ingredients and foodservice businesses, while exploring divestment options for its global consumer businesses.

The decision to focus on B2B dairy nutrition was made after a strategic review.

Fonterra's chairman, Peter McBride, said the new strategy would create a pathway for greater value creation and allow for enhanced financial targets and policy settings.

The co-op has set a target average return on capital of 10%-12% and a new dividend policy of 60%-80% of earnings.

Fonterra's chief executive, Miles Hurrell, said the company's focus on New Zealand milk, sustainability and dairy innovation remained unchanged, but it would now streamline its operations to concentrate on the ingredients and foodservice sectors.