New Zealand’s largest dairy company employs about 600 people in Sri Lanka and has one manufacturing facility.
Sri Lanka is a consumer and foodservice market for Fonterra, and also supplies dairy products to surrounding countries. The company’s Ratthis and Anchor brands are the top two consumer dairy brands in the country, and historically it has been a good performing market for the co-operative.
However the country’s economic crisis has hurt Fonterra, as the rapid drop in the value of the Sri Lankan Rupee made it harder to pay for New Zealand products, where were priced in US dollars. In its third-quarter update in May, Fonterra said this resulted in an $81 million adverse revaluation of its Sri Lankan business payables owing to New Zealand, and noted the amount may continue to vary as Sri Lanka’s currency fluctuates.
“Economic challenges continue in Sri Lanka, and our focus remains on the safety and wellbeing of our people and their families,” Fonterra’s Asia Pacific chief executive Judith Swales said in a statement on Thursday. “We are continuing operations, albeit at limited capacity, and doing our best to make food nutrition available.“
Sri Lanka’s president Gotabaya Rajapaksa and his wife fled the country on Wednesday aboard an air force plane bound for the Maldives, and he made his prime minister the acting president in his absence. That appeared to only further roil passions in the island nation, which has been gripped for months by an economic meltdown that has triggered severe shortages of food and fuel.
Thousands of protesters who wanted Prime Minister Ranil Wickremesinghe to go had anticipated that he would be put in charge. They rallied outside his office compound, and some scaled the walls. The crowd roared its support for the people charging in and tossed water bottles to them.
“As a resilient nation, Sri Lanka will come out of these challenges,” said Fonterra’s Swales. “In the meantime, we will continue our care for our people and their families and keep the business running so that nutritious dairy is available.”
According to its website, Fonterra Brands Lanka has been collecting milk from local farmers in Sri Lanka since 1997 for set and stirred yoghurt, drinking yoghurt, fresh milk and flavoured milk. Milk is collected from 4500 dairy farmers in Sri Lanka, it said.
Swales noted that even in difficult times, Fonterra’s Sri Lanka team was continuing to get new produ
Although he fled, Rajapaksa has yet to officially resign, but the speaker of the parliament said the president assured him he would do so later in the day.
The political impasse only threatened to worsen the bankrupt nation’s economic collapse since the absence of an alternative government could delay a hoped-for bailout from the International Monetary Fund. In the meantime, the country is relying on aid from neighbouring India and from China.
– With AP
