Fonterra cuts jobs despite dairy price rise
The Co-operative had announced 523 job losses in July 2015 but have today revealed that another 227 positions will be going.
CEO Theo Spierings said that Fonterra had to make the hard decision to cut the jobs due to the current industry environment.
“We have great people, but we have to make tough decisions to ensure Fonterra remains competitive in this environment,” said Spierings.
“We will continue to fine-tune our organisation to ensure we best support the initiatives identified by our business review. Our business is looking to the future with the momentum, energy and solid plans needed to keep improving performance.”
Fonterra has said that the review is an ongoing process and includes examination of all business operations.
ANZ re-evaluates farmer’s payout
Prior to the job cut confirmation ANZ Bank last week predicted that Fonterra will pay its farmers more for the quarter ending the 31 May.
The bank predicted a pay out of NZ$4.25 – NZ$4.50 per kilo of milk solid. Previously it believed pay outs would be between NZ $3.75 – NZ$4.00.
The price rise is due to a 16.5 per cent rise in global dairy prices in an auction held last week. Whole milk powder prices raised by 20.6 per cent in the auction.
ANZ listed a number of factors contributing to the rise including seasonal demand in China, slowing down of supply in parts of Europe and the belief that New Zealand supply will slow down too.
The bank however said that NZ$4.50 was still a low price and farmers would no doubt continue to experience tough times.