[WELLINGTON] New Zealand dairy co-operative Fonterra said on Wednesday it planned to cut jobs as it struggles to improve sales in the face of falling global dairy prices.
As demand for infant formula and other dairy products has slowed in China and other countries, earnings at the world's largest dairy exporter have taken a hit, hindering its efforts to expand into value-added and branded products. "We recognise the need to re-set our business accordingly - what worked in the past doesn't necessarily work now," CEO Theo Spierings said in a statement. "We are turning over every stone and pressure-testing everything. This includes our current staff numbers and how we line up to drive cash back to our farmers." The company did not specify how many jobs would be cut.
The planned redundancies are part of a company-wide review of the farmer-owned co-operative, the results of which Spierings said would be announced in coming months.
Having dominated the commodity milk powder sector for years, the co-op is aiming to deliver more food services and specialised ingredients in China, its biggest market, and in other emerging countries where it expects demand for dairy products will grow.
Fonterra's profits have been falling for nearly two years in the face of volatile dairy prices, which have slumped to their lowest level in nearly six years after soaring to record highs in 2014.
Mr Spierings told Reuters last month that he expected only a slight pick-up in global dairy prices over the next year, adding that the co-op planned to slow spending on expansion if demand remained sluggish.