Latest / Best of Business / Miles Hurrell: Fonterra chief executive on the company's new Southland plant

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Miles Hurrell: Fonterra chief executive on the company's new Southland plant · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks Be Follow
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  Speaker 2: Fonterra is set to invest one hundred and fifty million
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  Speaker 2: bucks to build a new plant in Southland to meet
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  Speaker 2: growing demand from Asia. The plant will produce uht cream,
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  Speaker 2: with demand expected to rise more than four percent every
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  Speaker 2: single year for the next decade. The chief executive, Miles Hurell,
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  Speaker 2: made the announcement in Malaysia today. He's traveling with the
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  Speaker 2: Prime Minister's delegation as have A Jatam Hi, Miles Hi,
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  Speaker 2: this is fantastic stuff. Why do they like the uhta
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  Speaker 2: cream so much?
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  Speaker 3: Yeah, I mean it's been a growing market for us
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  Speaker 3: for quite some time, mainly on the back of China
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  Speaker 3: for the last a decade or so. But you know,
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  Speaker 3: we're reaching to a point where our capacity and the
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  Speaker 3: wakados are are filling up and so we need to
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  Speaker 3: invest more.
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  Speaker 4: So south it's the right thing for us.
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  Speaker 1: Yeah.
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  Speaker 2: And so what's going on here? Because I heard that
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  Speaker 2: apparently people in Southeast Asia are taking the coconut milk
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  Speaker 2: out and putting dairien. Is that what's up?
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  Speaker 3: Yeah, there has been a move more from the Western
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  Speaker 3: diet when we've been using our products in the Western
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  Speaker 3: diet more to sort of in that call call it fusion.
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  Speaker 4: So you know, such as laxa and milk teas.
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  Speaker 3: We're starting to see our products going to those those
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  Speaker 3: categories now, which which is great because of course that's
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  Speaker 3: what the traditional people in Malaysia and the like are eating.
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  Speaker 4: So it opens up a new market for us.
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  Speaker 2: Is there as much demand in places like that as
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  Speaker 2: there is in China?
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  Speaker 4: I mean it's off a lower base clearly.
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  Speaker 3: I mean the China story has been going going as
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  Speaker 3: a safe sort of five to ten years now, so
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  Speaker 3: it is growing.
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  Speaker 4: It's sort of double digit in some in some categories
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  Speaker 4: for us.
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  Speaker 3: So we are to see and being in Malaysia this week,
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  Speaker 3: you know, to see at first ham and hear from
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  Speaker 3: our customers and partners.
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  Speaker 4: You know, it's a great market for us.
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  Speaker 2: And is this a case of you guys hunting out
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  Speaker 2: alternative markets in order to diversify away from China or
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  Speaker 2: are they hunting you out?
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  Speaker 3: Well, it's a combination of both. I mean we've always
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  Speaker 3: been in the Southeast Asia market, you know, sort of
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  Speaker 3: fifty odd years in Malaysia and you know, it's it's
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  Speaker 3: just an opportunity for us to sort of grow beyond
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  Speaker 3: the China's market, So you know, it's an end story
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  Speaker 3: for us.
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  Speaker 2: Yeah, it's good, a good move, Okay.
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  Speaker 3: So why Edendale, Well, there's a bit of surplus cream
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  Speaker 3: in that in that area. You know, most of our
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  Speaker 3: cream capacity in the north is field at at White Tar,
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  Speaker 3: So this is an opportunity to sort of turn what
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  Speaker 3: maybe you perceived as a sort of a commodity end
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  Speaker 3: of the cycle for some of the cream that we
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  Speaker 3: had down there and put it into this area. And
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  Speaker 3: of course, you know, opening up to seventy year old
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  Speaker 3: new jobs in the area well received as well. I'm
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  Speaker 3: sure by that by the region.
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  Speaker 2: Oh, i'd imagine. So yeah, any concerns at all about
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  Speaker 2: actually finding the workforce.
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  Speaker 4: No, I don't think so.
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  Speaker 3: I mean, we've got pretty strong relationships with the unions
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  Speaker 3: and as a result it get you know, some pretty
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  Speaker 3: good talent comes through through the pipeline, So I know
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  Speaker 3: we're not concerned about that. You know, we've got a
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  Speaker 3: strong pipeline of people coming through right across the country
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  Speaker 3: and miles.
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  Speaker 2: You know, you're doing this at a time when we
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  Speaker 2: are talking about so many businesses just being unable to
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  Speaker 2: cope with the power prices and it being part of
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  Speaker 2: the reason why they're talking about shutting down. Is that
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  Speaker 2: a concern for you at all?
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  Speaker 3: Well, if anything, it sort of reinforces the need to
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  Speaker 3: continue to add value because on one side, you know,
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  Speaker 3: your costs continue to go up and you're under pressure,
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  Speaker 3: so you've got to look for new markets and new
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  Speaker 3: avenues to grow you grow the top line. So you know,
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  Speaker 3: if anything, it sort of pushes us into that space.
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  Speaker 3: But we are conscious that you know, the New Zealand
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  Speaker 3: and the world is not in a great space right now.
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  Speaker 3: But you know there's confidence for us in both the
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  Speaker 3: New Zealand market and in globally. And you couple this
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  Speaker 3: with our announcement last week and start them around our
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  Speaker 3: ingredients business. You know, it shows that the industry is
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  Speaker 3: in good shape. And and Fonterra is also a good joke. Yeah.
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  Speaker 2: Do you think the power thing is going to resolve itself?
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  Speaker 3: I think so these things over time have habit of
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  Speaker 3: is working themselves out. The markets will sort of, you know,
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  Speaker 3: get back to an equilibrium. But but there's a bit of
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  Speaker 3: pain on the way through. As we can all see,
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  Speaker 3: and it's you know, at least it's it's front and
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  Speaker 3: center now with those and Power and Wellington, so hopefully
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  Speaker 3: they can they can see some change coming through.
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  Speaker 4: But but you know, it's a stress for the industry,
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  Speaker 4: no question, Miles.
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  Speaker 2: How's the trip going?
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  Speaker 4: You're going?
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  Speaker 3: Well, you know, the Prime Minister has been out there
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  Speaker 3: sort of wave in the new New Zealand flag. You know,
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  Speaker 3: we're here with other food and beverage companies, these education,
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  Speaker 3: the tourism and he's doing a good job on that front.
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  Speaker 3: But it's been pretty pretty busy the last couple of days.
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  Speaker 3: We're off to South Korea a ladder tonight, so looking
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  Speaker 3: forward to that.
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  Speaker 2: You've got enjoy yourself. Miles really appreciated this. Miles Hurral,
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  Speaker 2: chief executive of fond Eira. How good is that news
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  Speaker 2: for Edendaligan.
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