Fonterra recently registered their first ever financial loss of $196 million, but their Chinese operations didn’t show signs of that, as the company’s local operations booked conference management for an all-expense corporate trip to the Hainan Island’s 5-star Sanya Resort for its staff and distributors.
More than a hundred people attended the event, which marked five years of Fonterra’s subsidiary, Anchor, operating in China. According to a spokesperson from the company, part of the event included briefing media, corporate partners and customers on their strength in China and the plan for the next year.
Another similar event was held in Huntington Beach, in Southern California, where conference management was called in to handle a sales and marketing meeting for 200 of Fonterra’s European employees.
Notably, despite the size of the loss, it goes overlooked or outright unmentioned in China. Blog sites like Weixin instead focus on Fonterra’s annual revenue in the country, which sits at $4 billion, on top of its employees and properties.
According to President Christina Zhu, Fonterra Greater China, the success of their Anchor brand products were a sign that they were on the right track in China. She says that Fonterra China aims to triple their Anchor sales over a three year time-span.
However, Zhu has openly admitted that the company’s Chinese dairy farms had been under pressure to turn in a profit for quite a while now.
The dairy giant has recently began an ecological programme with the Chinese government, which aims at converting manure into compost to be given to the local farmers, who, in turn, sell their crops to Fonterra’s farms. Zhu says that the there will be some issues regarding costs, for the short term, but that, in the long run, the project would be a sustainable development, and will be a way to cut down on costs.
There is little, if any, discussion regarding the company’s recent financial loss, with focus instead on potential developments. However, the company’s relationship with their investment partner in China, Beingmate, has been under some scrutiny recently, following the company revealing that their original investment in 2015 was not $750 million as Fonterra reported, but was, in fact, only $439 million.
According to Fonterra’s representative on the Beingmate board, Johan Priem, they could not guarantee accuracy regarding the company’s financials.