The real issue is poor governance and bad decision making over a long period of time made by a board of dubious ability. Blaming staff and making them bear the consequences is unjust and won't rescue Fonterra.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
The real problem lies with the very nature of Fonterra as a quasi co operative causing the fundamental conflict of interest, meeting the payout demands of its shareholder farmers and its serious need for capital. Can't help compare Fonterra with A2 or say FPH who both have little or no divi return to share holders because they need to retain capital for growth.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
That is a very good write up which is horrifying . Glad I have not bought the shares.
Agreed. Unfortunately I have a modest quantity.
I wonder where the Auditors have been on this ? This hasn't all happened in the last 12 months that they need these HUGE write-offs.
are any of those businesses really viable long term? if not there worth next to nothing
Who knows ? A relativly simple business of collecting and processing dairy milk from N.Z. suppliers and adding value by turning it into other products like ice-cream, yogurt, milk powder and cheese has been turned into some dysfunctional multinational behemoth at the behest of so called expert executives paid millions per annum.
This is a ****-up of cataclysmic proportions and its completely uninvest-able in my opinion.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Yes....and with the Fonterra share price.....and perhaps needing to destock somewhat....I think "our" banks will be needing to pull the pin on a few farmers. Especially recent conversions. On top of this....if Fonterra is in as much trouble as we suspect...how can they sustain the generous milk price ? Rocky road ahead. China might pick up another low cost asset. Let them do it and then switch everything to horticulture / or forestry.
guess with increased chinese factories in NZ this is a potential risk for fonterra in the future
Dairy factories would have a huge amount of fixed cost, and an asset that isn't valuable as anything else. Better to try and fill up your plant to average down your fixed costs.
Originally Posted by bohemian
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