New Zealand dairy giant Fonterra said today (24 June) that it has consolidated its core operations into a single strategic business unit and reorganised its senior management team accordingly.

The new unit, Fonterra Operations and Trade, brings together all functions from farm gate to Fonterra's global trade customers, including milk supply, milk collection, NZ operations, offshore milk sourcing and processing, supply chain and global trade.

Gary Romano, formerly Fonterra's director of group manufacturing and supply chain, will head up the unit. Andrei Mikhalevsky will become managing director Fonterra global ingredients and foodservices. Romano and Mikhalevsky will report to Fonterra CEO Andrew Ferrier.

The changes are designed to drive greater efficiency and improve the focus of the group's global ingredients business, Ferrier said.

"For our strategy to be successful, Fonterra's core must continue to get more and more efficient. That will always be fundamental. The quality of our milk right across our supply chain will also always be fundamental to our success. Gary's appointment gives more weight to this drive," he said.

Fonterra has witnessed declining dairy commodity prices as oversupply and falling demand depress the global dairy market. The company has looked to boost profits by increasing its focus on value added products.

Ferrier emphasised that Fonterra would continue to follow this strategy and develop partnerships with existing and new local and global customers.

"Many of our major customers around the world are forecasting big growth over the next few years. We have an opportunity to become much more involved with them as their preferred supplier and partner."

Fonterra's regional consumer brands businesses will continue to operate as strategic business units.