Fonterra remains fourth top in dairy

Fonterra has retained its fourth placing in Rabobank's latest survey of the world's top 20 dairy companies.

Top of the list this and last year was Swiss Nestle, with turnover in 2013 of $US28.3 billion ($NZ32 billion), nearly twice Fonterra's $US15.3 billion ($NZ17.3 billion), followed by France's Danone and Lactalis.

Eight companies were the same as the previous year. The two biggest changes were German company DMK, which has moved from 17th place to 13th, and Japan's Morinaga Milk Industry which has dropped from 13th place to 20th.

Chinese dairy giant Yili -which owns Oceania Dairy, the company which is building a $214 million dairy factory at Glenavy - has entered the top 10 for the first time, the first emerging market player to pass the threshold.

Last year was a challenging year for most of the world's major dairy companies with stagnant sales volumes in most OECD dairy markets, Rabobank dairy analyst Tim Hunt said.

Acquisitions became a more attractive route to lift sales and there were 124 dairy transactions during the year, up from 111 in 2012 and the highest since 2007.

Positioning for maximum effectiveness in the expanding Chinese market remained prominent.

Joint ventures were announced last year between Mengniu and Whitewave, and COFCO and Danone, while Yili announced a partnership with Dairy Farmers of America.

Mengniu took a stake in China Modern Dairy to secure raw milk supply. A joint venture was pending between FrieslandCampina and Huishan.

Despite the increase in transactions, there were no billion-dollar deals in the 12 months to June 30 this year.

While underlying growth would pick up in coming years, many markets would not return to the rapid growth rates seen before 2008. Mergers, acquisitions and joint ventures would remain a key avenue to growth and profitability, Mr Hunt said.

Add a Comment






Our journalists are your neighbours

We are the South's eyes and ears in crucial council meetings, at court hearings, on the sidelines of sporting events and on the frontline of breaking news.

As our region faces uncharted waters in the wake of a global pandemic, Otago Daily Times continues to bring you local stories that matter.

We employ local journalists and photographers to tell your stories, as other outlets cut local coverage in favour of stories told out of Auckland, Wellington and Christchurch.

You can help us continue to bring you local news you can trust by becoming a supporter.

Become a Supporter