Craig Norgate, CEO of New Zealand's newly created Fonterra Cooperative, vowed that the dairy giant would be "ruthless" in its use of capital and its aggressive global strategy for alliance and joint ventures.

Speaking at a meeting of the Wellington Chamber of Commerce yesterday, Norgate said: "As we look at our options internationally, we will be ruthless in our use of capital. We need to ensure we are maximising the return on the funds we employ."

Behind the aggressive drive is the fact that the new mega-company's first obligation is to deliver on the promise made to dairy farmers that Fonterra will save or earn an extra A$310m (US$155m) by the third full year after the merger.

Norgate also revealed that when the three companies merge later this month to create Fonterra, the executives from the NZ Dairy Board, Kiwi Cooperative Dairies and New Zealand Dairy Group are likely to be made redundant.

"We still have three boards. We will have one," he vowed: "We had three CEOs. We'll have one.

"Those with the whitest collars likely to be the most affected."