Thursday, March 28, 2024

Fonterra drops to sixth in global dairy rankings

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Asset consolidation which impacted year-on-year sales in US dollars and Euros saw Fonterra slip from fourth to sixth in Rabobank’s annual Global Dairy Top (GDT) 20 report.
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Fonterra says the move to sixth position on the list of the world’s largest dairy companies was also caused by greater environmental constraints being put on its suppliers which limited growth.

“As a result, these companies are likely to focus on value strategies and rationalisation of plant capacity,” the report said.

The top two spots on the list, which is ranked by turnover unchanged from last year, are Nestle (Switzerland), retaining first position, and Lactalis (France) coming in second. 

The top five on the list are rounded out by Dairy Farmers of America (up to third from sixth in 2019), French dairy company Danone (back one place to fourth) and Chinese Dairy Company Yili (up to fifth from eighth).

The shift from the Yili Group (Inner Mongolia Yili Industrial Group Co.) which owns Oceania Dairy in South Canterbury was on the back of a 20% year-on-year growth in 2019

The report said exchange rate fluctuations, modest commodity price appreciation, below-trend increases in milk production in key exporting countries and limited organic growth in major dairy categories contributed to relatively modest gains in the combined turnover of the Global Dairy Top 20.

Merger and acquisition activity in the global dairy arena during 2019 totalled 115 deals, just outpacing the prior year’s 112.

As of mid-2020, the number of dairy deals stands at 52, impeded by covid-19 and foreshadowing a more active deal environment in 2021.

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