Fonterra floats on milk prices, expansion plans

Posted by Nicole Eckersley on 8th April 2010

Increased milk prices in online trading, combined with a move to open shares to flexible trading, and the announcement of a new milk processing plant in Canterbury, has buoyed expectations for New Zealand dairy giant Fonterra.

Prices for whole milk powder were up 21% in the April sales of globalDairyTrade, Fonterra’s online sales platform, from US$3755 per tonne FAS to $3969 per tonne FAS.  Anhydrous milk fat sales were up 21.9% and skim milk powder was up 25.5%.

This comes after yesterday’s announcement of a new milk processing plant near Darfield in Canterbury, expected to open in September 2012.  Options being considered include a high-efficiency milk powder plant, capable of processing 2.2 million litres of milk per day, or a plant for high-value nutritional milk powders.

Fonterra also announced that it would be considering changes to its capital structure, allowing farmers to buy and sell Fonterra shares amongst themselves, allowing flexibility for farmers and consistent share capital for Fonterra.