Comment: What do farmers want to do with their $6.35 billion of equity in Fonterra?
Do they want Fonterra broken up and sold, and that capital returned to them so they can repay debt and buy more land? Or do they want to carry on investing more heavily in value-add assets in marketing, distribution and R&D here and overseas?
New Zealand Inc would prefer the latter, but farmers are clearly having doubts, and a breakup is a live question after Fonterra's first annual loss and the announcement of a strategic review of its assets, with a fresh look at its capital structure.
It was clear from last week's news conference that all options are on the table, including selling assets offshore and returning capital to farmers. Fonterra could end up as a collection of milk drying plants that export paper bags of milk powder, or it could continue down the track of spending heavily on more sophisticated production, processing, marketing and distribution here and overseas. read on . . . .