Fonterra promises profit boost

By Nick Smith

Friday 29th November 2002

Dairy giant Fonterra Co-operative Group yesterday promised to double its earnings to about $80 million for its new specialty milk ingredients business.

The Health and Nutrition unit, which opened in Auckland yesterday, incorporates existing products from three legacy companies into one "specialty milk components innovator."

Chief executive Craig Norgate said the unit aimed to become the leader in the development and commercialisation of "bio-active ingredients for health and wellness."

Its opening was one of the key themes from "The Fonterra Strategy" and is expected to double existing earnings to about $80 million, he said.

Key markets for the specialty ingredients products include the US, Japan, Korea and China.

The "bio-actives market" had huge potential and "in the US alone, we expect to see growth double to a value of more than US$60 billion in the next four years," he said.

"By focusing on specialised research and development now, we will be well-placed to capture a good share of this growth, Mr Norgate said.

"The opportunities are virtually endless and we now have a strategy and discovery unit in place to identify, capture and maximise these returns to shareholders and ensuring that we stay ahead of the competition."

Key areas for the unit, headed by Patrick Geals from pharmaceutical giants Glaxo SmithKline and Novartis, to investigate include finding products that show benefits for the immune system, bone health, dermatology, gastrointestinal, sports and animal health.

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