Farmers in Australia and New Zealand have greeted Fonterra’s goal of doubling its value-added return in the next three years with a degree of scepticism.
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In Fonterra’s three-year business plan, which was leaked to local media this week, the company said it aims to increase its value-added return to 80 cents per kilogram.
The company’s value-added return, which measures the profit made over and above selling milk powder, is largely made up of revenue generated by Fonterra’s branded products.
According to Fonterra’s 2008 annual review, the value-added return was 31 cents in 2007-08 and it is forecast to be 40 cents for this season.
Critics have reportedly slammed Fonterra for its failure to set out a plan of how it can drive value-added growth.
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By GlobalData“We are hopeful it can be achieved,” Federated Farmers dairy chairman Lachlan McKenzie tols The Dominion Post. “But they have not got a proven track record in this department.”
