On February 4th, Fonterra Cooperative (hereinafter referred to as Fonterra), the largest dairy company in New Zealand, officially disclosed its performance in the first quarter of fiscal year 2121 (from August 1, 2121 to October 31, 2121).

the data shows that in the first quarter of fiscal year 2121, Fonterra achieved a total revenue of NZD 4.18 billion, a slight decrease of 1% year-on-year; After the adjustment, earnings before interest and tax reached 251 million New Zealand dollars (about 1.15 billion yuan), an increase of 72 million New Zealand dollars, with an increase rate of about 41%.

Fonterra said that customers' continuous demand for dairy products and careful management of the supply chain are the main reasons for the company's good performance, and the company's gross profit has increased due to the improvement of profit margins in Greater China and Southeast Asia and the increase in catering services and consumers.

The purchase price of raw milk has risen

With the gradual recovery of the China market from the epidemic, the demand for dairy products has rebounded strongly. However, due to the strong demand from China buyers, especially the demand for full-fat milk powder, the purchase price of Fonterra's raw milk has further increased.

due to the strong demand for new Zealand dairy products, Fonterra announced that it has narrowed the range of expected prices for the purchase of raw milk for pasture in 2121/2121.

"Raising the price from NZ $ 6.31-7.31 to NZ $ 6.71-7.31 per kilogram of milk solids means that the middle price of the purchase price, that is, the remuneration that dairy farmers will receive, has increased to NZ $7 per kilogram of milk solids." MilesHurrell, CEO of Fonterra, said, "We see that the demand in the China market continues to recover from the impact of the new crown epidemic, which was fully reflected in the recent auction of the global dairy trading platform (GDT). The strong purchasing demand of China buyers, especially their demand for whole milk powder, is the key factor to promote the increase in the purchase price of raw milk. "

Hurrell said that the company continued to make progress in implementing the strategy, with a good start in the first quarter of this year. After the adjustment of the Group, earnings before interest and tax reached NZ $251 million, an increase of NZ $72 million over the same period last year.

"The sales volume is the same as last year, which reflects the strong demand for dairy products in the market and the result of our efficient management in the supply chain. The improvement of the whole business has increased our adjusted income by 41%. " Hurrell said that as the China market continued to recover from the epidemic, the demand for dairy products rebounded strongly, which helped the catering service business in Greater China achieve excellent performance in the first quarter. "In the first quarter, our catering service business expanded to 13 China cities, which made the total number of cities that our business could reach more than 361."

despite the outstanding performance in the Asian market, Fonterra's performance in the reporting period showed a certain "regional disharmony"-the decline in sales in Africa and the increase in costs in Europe, which offset its growth in the Asian region.

China Ranch continues to lose money?

Since the establishment of the first experimental pasture in 2117, Fonterra has built three dairy farming bases in China, which are located in yutian county, Hebei Province, Yingxian County, Shanxi Province, and the pasture built with Abbott in Qihe County, Shandong Province.

Fonterra has more than 31,111 lactating cows in China * *, and produces more than 331 million liters of milk every year. According to industry data, Fonterra China Ranch produces high-quality raw milk every year, accounting for 1% of the total milk source in China dairy industry.

However, Fonterra's management team has been under great pressure from public opinion because of its poor performance, the exposure of China Ranch's continuous losses and its investment in Beinmei.

in order to supplement the cash flow and get rid of the burden, in October this year, Fonterra announced that it would sell its two pasture groups in Shanxi and Yutian, Hebei, and its pasture in Hangu to Inner Mongolia Natural Dairy Co., Ltd. and Beijing Sanyuan Venture Capital Co., Ltd., subsidiaries of Inner Mongolia Youran Animal Husbandry Co., Ltd. for a total price of 555 million New Zealand dollars (2.5 billion RMB).

since then, the sale, which lasted for more than a year, has also been settled. The next step of the transaction is to obtain the anti-monopoly permission of relevant departments in China and the approval of other regulatory authorities, and it is expected to be completed within this fiscal year.

It is not only a decision made by Fonterra after full consideration after the establishment of the ranch in China in 2113, but also meets the needs of its current global strategic planning.

In this regard, Hurrell said that the sale of China's own pasture will help the cooperative to give more priority to the business areas with competitive advantages. "In the past 18 months, we have been reviewing all aspects of each business to ensure that our assets and investments can meet the needs of today's cooperative development. Selling our own ranch is in line with our decision to focus on New Zealand milk sources. "

unqualified milk powder sampling

As we all know, Fonterra started from big-bag powder (full-fat milk powder), and many milk powder enterprises at home and abroad are buying big-bag powder from Fonterra to make infant formula milk powder by dry process. Fonterra is also an important shareholder of Sanlu milk powder.

Feihe, Qiqi, Sanyuan, Cradle, Wandashan and Junlebao directly use fresh milk as raw materials to produce infant formula milk powder, commonly known as "fresh milk technology". Based on this, Feihe and Junlebao led the strong rise of domestic milk powder, and their market share continued to rise.

But in fact, Fonterra also has its own infant formula brand in China, such as Anmum. However, due to the unaccustomed channel and marketing, Fonterra is insignificant in the infant formula industry in China.

Recently, the General Administration of Customs released information on food and cosmetics that were not allowed to enter the country in May 2121. In May, 2121, the national customs detected 173 batches of food that failed the safety and hygiene project and were not allowed to enter the country.

this time, there are 1 batches * * * 75kg of full-fat milk powder imported from New Zealand and produced by FONTERRA limited, but they are not allowed to enter the country because of the unqualified sensory inspection.

in the information of food and cosmetics that were not allowed to enter the country in April 2121, there were also 1 batches of * * * 25kg skimmed milk powder imported from New Zealand and produced by FONTERRALIMITED, which were refused entry due to unqualified packaging.

It is noteworthy that, in addition to Fonterra, other imported milk powder frequently appeared on the black list of quality, especially the French tainted milk powder, which greatly reduced the brand image of imported milk powder.

On October 2nd this year, Guangdong Provincial Market Supervision Administration issued a notice (No.217, 2121) on risk control of 1 batches of unqualified food. According to the circular, the State Administration of Market Supervision entrusted Guangzhou Inspection, Testing and Certification Group Co., Ltd. to carry out the food sampling inspection plan of the General Administration in 2121. The company sampled the "Kangweiduo Hollerie infant formula 1-6 months old" imported by Beijing Shida Global Science and Trade Co., Ltd. sold by Shawan Chendianfei Baby Products Firm in Panyu District, Guangzhou, and detected prohibited substances.

"Imported milk powder is not equal to high quality, and Kangweiduo, known as a century-old dairy company, has detected prohibited substances, and the unqualified milk powder of Fonterra is the best explanation." People in the industry told Grains Finance that domestic milk powder is now at the best level in history, and mainstream brands have passed the random inspection for 111% in a row, while imported milk powder has repeatedly had accidents, which will further change the market structure of China milk powder.

"Domestic milk powder has been ahead of the world in many aspects, such as milk source, processing, formula, inspection, and implementation of standards. It is no exaggeration to say that the quality of domestic milk powder is already the best in the world, but it must be one of the best." Song Kungang, Chairman of the China National Committee of the 3rd International Dairy Federation, said above.