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The Cobden Fonterra factory will continue producing all product lines regardless of a possible listing on the Australian Stock Exchange.
Fonterra Australia managing director René Dedoncker made the commitment on Thursday, saying the Australian business was in a strong position, with good earnings and sound fundamentals.
He said the basics were in good order and customers and farmers were in a good place.
The managing director said Fonterra did not need to retain 100 per ownership of the Australian arm and while the company would retain a significant stake, there may be an opportunity for local ownership - mum and dad investors, farmers and investors.
"Frankly it's the perfect time," he said.
Mr Dedoncker said Fonterra needed capital to invest in its New Zealand business and Fonterra Australia was poised to grow.
"We can now generate that locally, cash out if you like new, but there's an opportunity for ownership locally, to invest and to have a stake in the business," he said.
"This is about the ability to have a win-win and we get a chance to make a difference locally."
Mr Dedoncker said Cobden was the home of Western Star butter, a classic and iconic dairy brand "that is now in more fridges than it ever had been".
He said local farmers may now get the opportunity to have a potential stake in the business they supplied.
"That is one of the stories we will be telling. It's a decision that's good for Fonterra and good for farmers.
"It will boost confidence. Local decisions can be made based on local markets.
"Cobden is one of our flagship manufacturing sites. We are heavily invested in everything we make there.
"We are here to stay. I'm energised by what is happening," he said while making a commitment that the Cobden factory would continue producing all its line of products.
Mr Dedoncker said that in the lead-up to Christmas decisions would be made about the future direction of Fonterra Australia and post-Christmas that plan would be executed.
He said those plans would involve the valuation of Australian Fonterra and how much of the business would be retained by Fonterra.
Earlier: Questions about the future of dairy giant Fonterra Co-operative Group in Australia have again been raised after it announced it would proceed with an ownership review of its Aussie arm on the back of flat sales growth.
The co-op, which has a factory at Cobden, is considering its ownership structure for Fonterra Australia. One option includes an initial public offering on the Australian Stock Exchange - with the company saying its intention is that the co-op retains a significant stake.
Fonterra's chief executive officer Miles Hurrell said the Australian business was on strategy and remained important to the co-op.
"By having access to ongoing external capital, we believe the Australian business will be best placed to deliver on its strategy and capture its full potential, at the same time as unlocking capital for the co-op," he said.
"The strength of the Australian business has been demonstrated through recent results and execution of its strategic plan.
"Under the leadership of René Dedoncker, the Fonterra Australia management team has a clear strategy to maintain the business' current momentum, supported by continued investment in product mix and growth."
But speaking to NZ shareholders, Mr Hurrell's emphasis was different.
"Fonterra Australia is on strategy for the co-op and remains an important export market for our New Zealand milk, especially for food service products and advanced ingredients," he said.
Mr Hurrell said freeing up capital by at least partially offloading its Australian and Chilean businesses would be "critical to enabling greater focus on our New Zealand milk".
"Our focus on New Zealand milk, sustainability, and innovation and science will see us shift every aspect of our business to create more value," he said.
"In doing so, we aim to continue to improve our financial performance and, as a result, strengthen our ability to repeatedly generate cash and create value for our shareholders and New Zealand."
The comments are remarkably similar to the 2016 comments of then Fonterra NZ chief executive Theo Spierings, who said Fonterra was going to "drive every cent of money which we can out of Australia back to New Zealand shareholders".
At the time, they created a heated backlash from Fonterra's Australian suppliers.
Not surprisingly, Fonterra's overtures to farmers here to create an Australian cooperative failed.
Despite that, Mr Dedoncker seemed to today signal another advance towards asking local farmers for an investment in his business.
"Today's announcement is an important milestone for our business which plays a significant role in the Australian dairy industry," he said.
"It would be a great outcome if Australian investors, including our staff and the farmers who supply us with their milk, could have the opportunity to participate in the ownership of our business with its iconic Australian brands such as Western Star, Perfect Italiano and Bega cheese.
"As we explore our options we will be mindful that our customer and farmer relationships are core to our business.
"These key stakeholders can be confident there will be no change in how we engage with them through this period, while an outcome that results in improved access to external capital will enable Fonterra Australia to continue advancing the Australian dairy industry."
Fonterra Australia Suppliers' Council chairman Alan Davenport said he hoped ownership options could present opportunities to further align supplier interests.
"Farmers are already proud to supply milk for a fantastic stable of local brands, and I am pleased that one of the options under consideration is an IPO of Fonterra Australia," he said.
"I look forward to working with René and the team to ensure any change to the ownership structure builds on the partnership between Fonterra Australia and its farmer suppliers."
Fonterra has 10 manufacturing sites across Australia, five in Victoria.
It closed the Dennington factory at the end of 2019 putting 100 employees out of work.
The Cobden factory employees about 300 people and has been dubbed the home of Western Star butter.
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