Grant Robertson says Fonterra needs to be focusing more on the value-add side of its business

Value added? Cost added? Which is it? Have to be careful here having to compete with homegrown product in the marketplace and the relative cost of overheads & labour there. And then there is branding and then there is the politics. Many years ago saw the then Dairy Board make absolute fools of themselves, on all of the above counts, over a certain retail product in Malaysia.

Grant with no skin ever in the game, shouldn't be giving advice.

"Grant studied politics at Otago, graduating with a Bachelor of Arts with Honours in 1995. His involvement in the campaign against user-pays education led him to become President of the Otago University Students Association, and later Vice President and then Co-President of the New Zealand University Students Association.
After leaving university, Grant joined the Ministry of Foreign Affairs and Trade, and was also posted to the United Nations in New York. On his return to New Zealand he became an advisor to then-Minister of Environment Marian Hobbs, then to Prime Minister Helen Clark."

Ah, the old '80's chestnut. Value added.

Dairying is the turning of fossil fuels into food - a temporary state of affairs. Making more money from that process? What will the digital '1's and '0's be able to be exchanged for?

Jack did similarly, trading the family cow for some magic beans.

What we need are leaders who realise that the fossil-fuelled agriculture we practice, is not permanent. Who can facilitate a morph to more sustainable farming practices and more people per arable hectare. Because surely that is what is coming. It would be better to go there before the pressure comes on.......

this chaps a clown. Value add has been a concept that has been around for the best part of 25 years. There is only so much you can do with a "grass" by product. But then again, Shane, and Grant have a huge degree of experience running a large multinational dairy business.

As I understand it, they were being given this advice prior to the dairy downturn, failed to implement it and got burnt because of this. Since then they have been making changes. Seems that this could be political grandstanding. "Robertson said the co-op had begun work on its value-add strategy in recent years, with some of its plant developments and its high-quality cheeses." So they should be doing what they have already begun doing...

New Zealand needs added value production. This is no mere management theory. It is essential to the life the country. And it's where Fonterra's failure is writ large and affects us all.

New Zealand has an added value society – health, ACC, education, welfare provisions, pensions, etc. We need added value in the goods we produce to sustain the nature of our society. We need to find, create, earn and capture a consumer/customer premium for our goods - the essence of adding value. In effect, though, we’ve been trying to finance an added value society with commodity products – trying to finance a developed-world lifestyle with developing-world production. It can’t be done. We borrow to fill the gap.

Our agricultural sector – Fonterra particularly – has led the country down the garden path in this – the idea that we can just sell more and more undifferentiated/commodity product to more and more relatively-uneducated consumers in China. Rather than seeking to add margin, add value, the company and sector has been and remains disproportionately focused on reducing the costs of production - in particular through many thousands of low or minimum-waged immigrant farm workers.

Imagining that we can go on expanding and intensifying commodity dairy production, that China will take whatever we produce if only it is priced low enough, and that this will support our economy and society, is no way forward - environmentally, socially or economically. This is the fiasco at the heart of Fonterra's thinking, and for too long it has been ignorantly supported by foolish and compliant government thinking.

I reckon Grant Robertson has no credentials for this office.

Having said that, Theo Sperrings et al have been utterly useless. GR would have had a hard time losing as much money in China as the Fonterra Executive have.

Maybe we could have a new reality show "Grant Gets A Real Job". Wait for the next parliamentary recess and instead of going overseas somewhere on a junket. Disguise him "Undercover Boss" style and send off to pretend to be working class for a week. Maybe even in a dairy factory somewhere. Could be a much better way to boost popularity than ballroom dancing.

WTF ?

Since when does the Government tell the productive sector how it should run its businesses ?

Someone should tell Robertson his sole purpose is to make doing business easier, so when GDP growth accelerates we all benefit ............

Instead we have coalition partners who want to upset the apple-cart and make things more diffiicult

A bit of Desperate Diversion, methinks. The Hon FM needs to be back in his counting-house, totting up the effects of the following:

• Nurses settlement (last seen at 1/4 billion and oops, that ain't enough - it'll be 1/3 billion before he can say 'Nurse, the Screens!')
• The effect of the NO settlement on health sector relativities. Pluck at one string, the whole harp resonates....
• The effect of the eventual NO settlement on teachers claims (16% when last seen, will shurely be more now)
• The effect of the Teacher's settlement on ECE, University sector salaries and the cascade through to PTE's
• The Police and Defence are waiting in the wings, considering their options. Remember the old saw: when two tribes fight, there's always a third tribe just sitting on the hill, out of the fray, watching and getting ready to capitalise on the result...
• The effect of removing the cap on public service staff numbers. While the trade-off is said to be Staff for Consultants, there is no way that they can get product-specific IT, engineering, geotechnical, or other niche professional advice any place else. The public service is well adapted to growing numbers, meetings, managers, reports and inputs. Not so much Outputs, Value-Add, or Body of Knowledge.

Wow, lots of jerking knees all over to night.
All he said was what Fonterras have been saying for years, only fonterra then spent $2b on powder plants and $200m on value add plants. With three times the Staff ( relative to production) and profit substantially behind the likes of Miraka ( they use geothermal not coal @ powderdownkiwi) and synlait Fonterra have simply not practiced what they preached to their ten thousand plus shareholders. The opportunity was there while there was fresh capital arriving via increased which milk production but they have squandered that.
Having politicians pocking sticks at Fonterra may not be ideal but it's more effective than the shareholders council. Ever.

And aren’t we spending a billion dollars on the mico plasma thing , Maybe sheep and a few subsidies weren’t so bad after all lol

And aren’t we spending a billion dollars on the mico plasma thing , Maybe sheep and a few subsidies weren’t so bad after all lol

Boy I'm so glad that the CEO of Fonterra is getting advice from the guy who was CEO of such companies as .... ummm.... ahhhh.....

whoops

We need to stop using the words "value add" and start talking about a value equation:

https://www.linkedin.com/pulse/nz-ag-why-we-must-stop-using-words-value…

As a retailer from Europe i was shocked at the limited product range in NZ ,Germany France UK have a huge range a market NZ consumers miss out on . Although you don't need to be that smart to spot a missed opportunity .

MPs shouid be barred from commenting on Fonterra and value add unless they can name, off the cuff, 100 or more of the >1000 products Fonterra makes. Perhaps the same should apply to people who comment on here too. ;-)

Workingman your writing style is very evocative of Pamu Chair Steven Carden's style. I wonder perchance if you are related?