Loss-making Fonterra selling livestock division
Dairy cooperative Fonterra is selling the livestock division of its Farm Source store and online support network to Carrfields Livestock for an undisclosed price. The deal is part of Fonterra's radical rethink of its business, after posting an almost $200 million annual loss last year - the first in its history.
Other moves include:
- pulling out of its catastrophic Beingmate investment in China, which it had to write down by $405 million last year;
- taking back full ownership of the Darnum plant in Victoria by the end of the year;
- putting ice cream maker Tip Top up for sale;
- re-evaluating its underperforming Chinese farms.
Fonterra Farm Source has had a livestock division since 2005, with around 25 agents, and almost 200,000 animals sold in 2017.
“While Farm Source’s livestock division has contributed positive returns since inception, we believe the investment required to maintain and grow this division can be more effectively targeted towards improving core areas of the Farm Source business,” said Richard Allen, Farm Source stores director.
The deal, which happens on March 1, will take Carrfields' livestock team to more than 150 agents across the country, Carrfields group managing director Craig Carr said.
While not all Farm Source livestock staff will be able to move to Carrfields, Fonterra said it will look for new opportunities for them within the cooperative.