NEW ZEALAND – The global dairy giant has announced that it will sell the Farm Source™ livestock division to Carrfields Livestock, a family-owned livestock and dairy herd agency.
The deal whose price was not disclosed is expected to be effective March 1, 2019.
According to Richard Allen, Farm Source™ Stores Director, the divestment plan was in line with the company’s larger review that is underway.
The transaction will see Farm Source work with Carrfields to develop a range of partnership offerings to ensure a positive connection and competitive offer remains for Fonterra farmers.
The two parties said they will ensure a smooth transfer of employees and clients, while some employs will be supported in identifying new opportunities within the Co-op.
The acquisition strategically positions the Ashburton-based Carrfields Livestock to expand its national rural agricultural services.
“This acquisition will take the Carrfields Livestock team to over 150 livestock agents spread right across the country.
This strategic partnership will offer Farm Source™ clients and Fonterra farmer owners access to a nationwide agent and sale yard network provided by a New Zealand family-owned business,” said Craig Carr, Carrfields Group Managing Director.
Fonterra launched the Farm Source initiative in 2014 with a goal to support dairy regions and farmers in New Zealand.
It combines service, support, rewards, digital technology and financial options for farmers, together with local Farm Source hubs to help in supporting the cooperative’s connection with the New Zealand rural communities.
“In the context of the review of the Co-op’s assets and investments, we have made the decision to sell the livestock division to Carrfields Livestock.
This will better serve the livestock team and the farms they service,” said Richard Allen.
“While Farm Source’s livestock division has contributed positive returns since inception, we believe the investment required to maintain and grow this division can be more effectively targeted towards improving core areas of the Farm Source™ business.”
Farm Source livestock has about 25 agents with a network of 70 stores across the country.
The strategic review follows the 2018 financial year report in which Fonterra posted a US$128.5 million loss, its first annual loss since its inception in 2001.