Jewels in the crown are NZ and Australian plants and the Anchor brand.
All four of Mainland Group’s geographic regions have improved gross profit over the past three financial years, Fonterra’s roadshow for potential purchasers has reported.
The Oceania division of New Zealand and Australia is the biggest with nearly $500 million gross profit, and 14% of revenue, in FY2024.
It is followed in size by southeast Asia on $293m and 36% gross margin, Sri Lanka $106m and 22% GM, and Middle East and Africa $41m and 17%.
The Mainland Group of consumer businesses in Fonterra has 15 manufacturing sites, 11 of which are in NZ and Australia.
Three of those Asian plants blend and repack milk powders and two make yoghurt and cultured milk drinks.
Only in NZ and Australia are a much longer list of dairy foods produced, such as cheeses, butter, spreads, cream, fresh milk and UHT products.
The roadshow presentation features eight major brands, led by Anchor with 24% revenue composition, 17% NZMP, 8% Mainland, 6% Bega (under licence), and 5% each for Anlene, Western Star, Perfect Italiano and Ratthi (Sri Lanka).
Therefore, the major components of value in Mainland Group are the NZ and Australian plants and the Anchor brand.
Oceania accounts for 60% of the gross profit of Mainland, followed by 24% in southeast Asia and 12% in Sri Lanka.
As a whole Mainland Group had net revenue of $4.9 billion in FY2024 with 916,000 tonnes of product sold and $200m of earnings before interest and tax, which is a 4% EBIT margin.
The return on capital for consumer businesses in the FY24 annual accounts was 7%, below the 10% for ingredients and 19% for foodservice.
The roadshow for potential divestment will be presented in NZ, Australia and Asia, led by Mainland chief executive-elect René Dedoncker and chief financial officer-elect Paul Victor.
The main possibilities are full or part sale to new owners or an initial public offering of Mainland with preference given to Fonterra farmer-shareholders.
Farmers will vote on whatever divestment shape the board and senior managers recommend.
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