Yep. Sell milk/powder.
Export logs.
Send animals offshore.
It's all the opposite of what I thought the way to go was.....
Yes and did I hear correct accouple of days ago that logs exported to China today are earning less than they were in 2016 I wonder if they thought of adding value here by selling sawn timber ? or are we a price taker instead of a price maker !
Yes and did I hear correct accouple of days ago that logs exported to China today are earning less than they were in 2016 I wonder if they thought of adding value here by selling sawn timber ? or are we a price taker instead of a price maker !
It is cheaper to sell logs overseas and to receive them back as timber. The costs are too high in nz. More economical overseas. This also goes for some fish caught in nz
Ok I used to be a Fonterra supplier and big fan but sold my shares at a loss 4 years ago and completely forgot about it.
Today I was informed the sale must be approved by shareholders and they have quoted savings beyond my expectations and a lot more. Positive in the extreme.
Needs closer examination by better minds than mine.
The Herald had an article this morning about selling off the value-add businesses. The people that bought Tip Top have increased turnover and profitability significantly in the first year and I think they said Tip Top is also exporting more ice cream.
The real argument for the sell offs is that Fonterra mgmt and staff aren't very good at running these types of value-add businesses. I guess as long as the buyers of the businesses don't use transfer pricing to make the profits in a tax haven, NZ inc might be better off.
That said I recall an article just the other day where 3M NZ found an error that raised their NZ support services costs from $41k to $21mill. Whoopsie that was a bit of a blunder. https://businessdesk.co.nz/article/l...penses-blooper
Sorry a Business Desk article from the herald even I cannot access online.
The sale of the power transmission network in Wellington also springs to mind, Chalkies article years ago was very enlightening. I learnt about thin capitalisation and transfer pricing and how it is not good for NZ.
mike2020 might have better information and a different view, probably has a better mind than me as well. Farmers are very sensitive about these things. I called a table of farmers a bunch of country bumpkins the other day and they got very upset and defensive. I guess they did not appreciate their table probably held more wealth and generated more export earnings than all the other tables combined at the pub, not sure why they worry about how smart they are, let the results speak for themselves.
They perhaps could be questioning the intelligence of top mgmt at Fonterra. They pay top dollar for them, shame they can't work out how to run their value add businesses. That said I think Miles has been doing a lot better than any of his recent predecessors, although that is based on vague memories of distant newspaper articles.
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