Home > Fonterra announces new five-point plan to support and increase milk production

Fonterra announces new five-point plan to support and increase milk production

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Believing that milk production should be backed by share ownership, Fonterra announced a five point plan on Thursday, 27 February, that allows farmer shareholders more flexibility in managing their farm businesses in order to support and grow milk production to support the Co-operative’s growth strategy.

"Milk is the life blood of the co-operative,” Fonterra Chairman John Wilson said.

The plan includes:

  • A bonus issue of one additional share or unit for every 40 held on 12 April 2013.
  • A further Supply Offer enabling Fonterra shareholders to sell the economic rights of some of their shares into the Fonterra Shareholders’ Fund1.
  • A Dividend Reinvestment plan enabling shareholders and unit holders to elect to receive dividends in the form of shares or units.
  • Flexible contracts to give new and growing farmers more time and options to fully back their milk production with Fonterra shares.
  • New opportunities for winter milk supply contracts in the upper North Island to fuel Fonterra’s new UHT plant at Waitoa.

On 24 April, the bonus issue will automatically provide all shareholders and unit holders with free additional shares and units. Each shareholder and unit holder will receive one bonus share or unit for every 40 shares or units held on 12 April.

“The bonus issue means our farmer shareholders can use these extra shares to back current or future production increases.  Alternatively, they might decide to hold them as an investment or sell them,” Mr Wilson said.

“Based on current production levels, the bonus issue means around 95 per cent of farmer shareholders will not need to buy additional shares next season to match any increase in production,” he added.

Fonterra was able to offer a wider range of options for farmers to achieve full ownership with the help of a stable capital base provided by Trading Among Farmers.

Fonterra will provide further details in the mid-year. For more information, click here.

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