A Japanese company with a need for very high-value lactoferrin had underwritten the $11 million expansion of processing capacity at Fonterra’s Hautapu site.
It was an example of the desirable “sticky relationships” that were good for business, Wickham told the annual meeting of shareholders at the company Waitoa UHT milk plant.
“We like sticky relationships with sticky pricing premiums so that we and they can build market shares,” Wickham said.
In South-east Asia a pricing and risk management package had been developed for a major customer of mozzarella.
The customer had wanted Fonterra to sign a three-year supply contract, which it was not prepared to do until the pricing was linked to the United States cheese futures to provide risk management.
Fonterra then used the NZX Dairy Futures market to lock in the effective cost of milk to produce that cheese.
Another example was a US customer for whey protein concentrate (WPC) that wanted the NZ provenance of grass-fed milk to be used in its advertising and was prepared to pay premiums.
It would grow to be the leading customer for Fonterra WPC inside of five years, he predicted.
“In China we helped a long-standing customer use a higher-specification milk powder that suits their manufacturing and for which they are prepared to pay a premium price.
“These are examples of how we are focused on finding solutions to provide building blocks towards our goal of being the number-one preferred supplier of dairy ingredient solutions,” he concluded.
