Fonterra opens new manufacturing facility in Indonesia

Fonterra Co-operative Group has officially opened its new blending and packing plant in Indonesia – its first manufacturing facility in the country. 

 Chairman John Wilson said the plant is Fonterra’s largest investment in ASEAN in the last decade and will support the growth of Fonterra’s brands – Anmum, Anlene and Anchor Boneeto – in Indonesia. 
“Fonterra has been supplying high quality dairy nutrition to Indonesia for more than 30 years and today it is one of our most important global markets. The opening of our new plant is an exciting step forward in our relationship with the country and local dairy industry,” he said.
Fonterra Managing Director Asia, Middle-East, Africa (AsiaMEA) Johan Priem said the investment strategically positions Fonterra to help meet Indonesia’s continuous growing demand for dairy nutrition.
“The country’s large and increasingly affluent population is looking for highly nutritious foods for all ages. This is fuelling dairy demand growth, which is expected to increase by five per cent every year to 2020.
“Our new plant has the capacity to pack around 16,000 MT of dairy ingredients a year – that’s a pack of Anlene, Anmum and Anchor Boneeto every second, or 87,000 packs every day, which will go a long way in helping Fonterra meet this growing demand for dairy.” 
Mr Priem said the plant located in Cikarang, West Java is already having a positive impact on the local community. 
“We used local partners for the construction and, when running at full capacity, our new site will employ a team of 160 local employees meaning the investment will continue to flow through the local community.
“The site also utilises Cikarang’s dry port, allowing us to ensure all of our operations are located in one area. This will help us drive logistical efficiencies,” he said.
New Zealand Minister of Local Government, Social Housing and State Services Paula Bennett said this new facility reflects the strength of the relationship between New Zealand and Indonesia. 
“On behalf of the New Zealand government, I wish to congratulate Fonterra on today’s official opening – it reflects the increasingly interconnected nature of global value chains, and more closely links our economies together.
“Our governments have set a target to grow two-way trade to NZD4 billion by 2024 and dairy continues to be a critical part of this relationship,” Ms Bennett said. 
The plant received an A grade rating from regulators during its final stages of testing and commissioning, and has been in commercial operation since June 2015.

Farmers can now milk Fonterra for funds

Fonterra farmers can now apply for Fonterra Co-operative Support, a loan to help them deal with the current challenging conditions. 

According to the dairy company, these challenging conditions include the low forecast Farmgate Milk Price for next season, which is currently set at $3.85 kgMS.

This is the first time the Co-op has leveraged its strength to provide support to its farmers at such a significant level, a Fonterra spokesperson noted.

Chairman John Wilson said Fonterra is well placed to help its farmers because of the Co-operative’s underlying strength.

“Being able to help our farmers is all about standing together as a Co-operative and using our collective strength to get through these tough times,” said Mr. Wilson. 
Farmer shareholders can apply for an interest-free loan of 50 cents for every kilogram of share-backed milk solids produced from 1 June to 31 December 2015. The loan will be interest-free until 31 May 2017, after which Fonterra may charge interest.

Farmers can repay all or part of the loan at any time and no security is required over their shares or any other assets. The loan will be repayable directly from milk payments, and automatic repayments will occur when Total Advance Rate Payments exceed $6.00.

Applications open today and close on 25 September 2015. Farmers can apply online (the preferred option) at, or by email, fax or post.


Cheesy does it: Australian cheese makers perform well despite tough conditions

According to the latest report from IBISWorld, cheese manufacturers Murray Goulburn and Bega Cheese have faced erratic market conditions over the past five years. 

While dairy prices have risen due to growing global demand, Australian cheese consumption has slowed, with consumers increasingly adopting healthier lifestyles. Australian consumers are also favouring quality over quantity, with sales of fresh cheeses increasing over industry staples like cheddar. 

As a result said IBISWorld, cheese manufacturing revenue is expected to decrease by an annualised 0.7% over the five years through 2015-16, to total $AUD5.5 billion. 

This decline has been slowed by cheese exports increasing at an estimated 10.8% annualised over the same period, to total $AUD1.2 billion, due to increased demand from Asia, said the US-based analyst firm.

To combat the rise in dairy prices and support revenue growth, Australia’s two largest cheese manufacturers have taken on different strategies such as global expansion and the pursuit of acquisitions.

Murray Goulburn is one of Australia’s largest cooperative dairy companies. The majority of the company’s revenue comes from manufacturing dairy products, which are sold primarily under the Devondale brand. 

In terms of cheese manufacturing, Murray Goulburn is expected to outperform the industry, with its cheese manufacturing revenue expected to grow by 2.5% in 2015-16 to $AUD1.2 billion. Murray Goulburn’s industry-related revenue has been aided by the rise in dairy prices over the past five years and growth in international demand for dairy products.

More than half of Murray Goulburn’s revenue is generated from exporting processed foods. The company also produces private-label cheeses for major supermarkets such as Coles. 

To meet increased export demand, Murray Goulburn has maintained a steady yearly increase in production volumes by providing its dairy farmers with financial support, bulk purchase of grain and interest-free fodder loans.

The majority of the company’s recent revenue growth has come from global trade and investment in distribution channels. The depreciation of the Australian dollar since late 2013 has also helped Murray Goulburn capitalise on the growing demand for Australian dairy exports.

Bega Cheese produces around 20,000 tonnes of natural cheddar cheese and 50,000 tonnes of value-added cheeses annually said IBISWorld. 

However unlike Murray Goulburn, Bega Cheese does not focus on exports, with about 80% of its production targeted at domestic markets like supermarket chains and other food-service providers. 

In 2007, Bega acquired a large slice of Tatura Milk Industries Limited and in 2008, signed a supply agreement with Kraft Foods Australia. In 2011, Bega Cheese merged with Tatura Milk in an effort to increase efficiency. 

In 2012, the company expanded its Tatura facilities to supply to the Middle East and has since maintained a supply partnership with Fonterra Brands (Australia) Pty Ltd. In the same year, Bega also cut a five-year deal with Coles to provide private-label cheese.

The company’s cheese manufacturing revenue is estimated to grow by 2.8% in 2015-16, to $AUD948.5 million. 

Bega’s business with Tatura Milk, Fonterra and Coles, as well as the company’s long history, has helped it to continue to grow while focusing on the domestic market. IBISWorld anticipates that the alliance with Kraft and outsourcing of marketing to Bonland Dairies Pty Ltd have helped Bega to grow its market share in the cheese manufacturing industry.

Over the next five years, IBISWorld said it expects Australian dairy consumption to grow, dairy prices to stabilise, and exports to increase. 

Product innovation, including functional, gourmet and healthier cheeses will help stimulate consumer demand, while a rise in exports to Asian markets will drive international trade.

Both Murray Goulburn and Bega Cheese are well placed to capitalise on these trends.

Orgran launches gluten-free breakfast cereals

Orgran has expanded its breakfast range with two healthy new cereal options suitable for the whole family.

Orgran’s Quinoa Puffs and Quinoa Flakes are the newest additions to the breakfast cereal range that also have a 4.5-Star health rating, and are gluten, wheat, egg, dairy and yeast free. 

The new cereals are also low in fat and low in sugar and will be available in independent supermarkets and health food stores from September, 2015.

Frosty Boy Australia wins international seal of excellence

Frosty Boy has received  world-leading  food safety and quality certification, and
the manufacturer’s new facility in Yatala has received an ‘Excellent’ rating in its Safe Quality Food (SQF) audit.

Frosty Boy was found to have a ‘Level 3 Comprehensive Food Safety and Quality Management System’ – the top rating, which covers Frosty Boy’s products including dairy powders, creams, beverage bases, gelato, jellies and soft serve.

An independent assessment, SQF is an internationally recognised food safety and quality management system and provides certification the manufacturer complies with food safety regulations in both domestic and international markets.

Frosty Boy has held an SQF certification since 2013 and the most recent audit provides evidence the new factory, opened in 2014, is maintaining and complying with food safety standards.

Dirk Pretorius, Frosty Boy CEO, said the Excellent SQF rating was validation of the company’s recent investment in the purpose-built manufacturing facility and the maintenance of proven systems and processes.

“This certification provides our customers with added confidence that the Frosty Boy products are manufactured using best practice systems,” he said.

“An SQF rating is an internationally recognised program and helps us reach new markets both here in Australia and overseas.”

As part of the audit, the Frosty Boy business was reviewed in its entirety to make certain every aspect of food safety was considered throughout its operations. 

Random tests of soft serve and beverage products were also undertaken as further evidence of compliance.

Andrea Thomson, Frosty Boy’s QA Manager, said food safety was the number one priority for the business.

“Our reputation with export markets is based on Australia’s highest standards and this ‘Excellent’ rating provides us with yet another competitive edge.”

Fonterra lowers CAPEX by $600m & revises milk volumes

 Fonterra Co-operative Group Limited has today announced that the forecast total payout available to farmers in the 2015/16 season will be $4.25-$4.35, comprising:
·         Forecast Farmgate Milk Price $3.85 per kilogram of milksolids (kgMS)
·         Forecast earnings per share range of 40 – 50 cents per share.
Fonterra has also announced Fonterra Co-operative Support of an additional 50 cents per shared-up kilogram of milksolids to support farmers this season.
Revised 2015/16 Farmgate Milk Price Forecast
Chairman John Wilson said the Farmgate Milk Price forecast has been reduced from $5.25 kgMS to $3.85 per kgMS due to the continued significant imbalance in the global dairy market between weak demand and surplus supply.
“Current prices are unsustainably low and we are seeing them beginning to impact production levels globally.  We have confidence that prices will recover over the course of the season. However, it will be a tough season for our farmers.
“We know the global dairy market will improve.  The hard thing to call at the moment is exactly when and how quickly,” said Mr Wilson.
Forecast available for payout
Chief Executive Theo Spierings said: “As part of this work and given the current pressures facing our farmers, we have reviewed our capital expenditure for the next two years. As a result we are now targeting a spend of $500million – $600million less for 2016 financial year compared to FY15.
“We will continue to update our farmers and the market on business performance and the delivery of expected gains from the transformation of the business as the year progresses,” said Mr Spierings.
Mr Spierings said Fonterra continues to believe strongly in dairy and this farmer support is an investment in the future of the Co-op.
A Fonterra Co-operative Support schedule will be made available as part of the application process.
Milk volume forecast 2015/16
Fonterra has reduced its New Zealand milk volume forecast for the 2015/16 season to 1,589 million kgMS, 2 per cent lower than the previous season.
Chairman John Wilson said the revision reflected the likely impact of farmers using more traditional practices to manage their farm businesses within the limits of a low payout forecast.
“We expect to continue seeing our farmers make these sorts of on-farm decisions – particularly in light of today’s announcements,” said Mr Wilson.


Milkovation launches premium VIVO probiotic starter cultures

Consumers can now look after their digestive health using Milkovation gluten-free probiotic starter cultures.

For centuries, people in Caucus have believed that fermented dairy products containing live active cultures offer health benefits. 

Recent controlled scientific investigations from around the world support these traditional views, suggesting that probiotics can be valuable part of a healthy diet*. Consumer awareness of health benefits of probiotics is also very high. VIVO probiotic starter cultures have been available in Europe for some time now. 

After careful assessment, Milkovation has launched a range of VIVO probiotic starter cultures in Australia and New Zealand. Packed under stringent ISO22000 (food safety) and ISO9001 (quality) standards, VIVO probiotic starter cultures contain unique blends of probiotic bacteria sourced from suppliers in France, Germany and Denmark.

Key features of VIVO probiotic starter cultures from Milkovation include:

  • Live probiotic bacteria (1-10 billion/gm)
  • GMO-free
  • Gluten-free
  • Allergen-free
  • Certified Halal
  • Suitable for dairy and non-dairy
  • Make mild, fresh-tasting yogurt and fermented beverage
  • Suitable for direct consumption with food and drink
  • Suitable for all ages including children, adults, seniors and sports people