At the forefront of its dairy industry is Fonterra, the world’s largest diary company and New Zealand’s largest company.
The cooperative with 17,500 staff globally is owned by 10,500 New Zealand dairy farmers and exports 90% of New Zealand’s milk.
“We collect 22 billion litres of milk a year,” Daniel Wrigley of Fonterra Communications told us during a Malaysian media visit to the Frontera facilities in New Zealand recently.
“Milk is collected by 483 tankers across the country and taken to 33 processing sites and 76 plants,” he said.
As the world’s largest dairy exporter responsible for a third of global trade, Fonterra exports some 2.3 million metric tonnes of dairy products and ingredients.
These are shipped via 11 ports to more than 100 countries each year, said Wrigley. The company has 103 (warehousing) stores – 45 of which are temperature-controlled. It has supporting road and rail networks to container pack locations, seven of which are sited on port and, a global sales network.
In the North Island, Waikato and Taranaki districts are well-known dairy farming regions for over 100 years. Large-scale dairy farming in the South Island is a more recent development.
Said Wrigley: “The company has more processing sites in the North Island as Waikato is the biggest dairy region in New Zealand. In Darfield, Christchurch (in the South Island), Fonterra has the largest milk powder dryers which can process up to 30 tonnes per hour.
Founded in 2001, Fonterra’s story goes back nearly 200 years to the birth of the dairy industry in New Zealand. Fonterra Co-operative Group was formed after the merger of the New Zealand Dairy Board, New Zealand Dairy Group and Kiwi Co-operative Dairies in October 2001. Around the world, Fonterra has 85 processing sites.
Its global reputation for the highest product quality, Wrigley explained, is achieved by maintaining world-best practices throughout its supply chain, with control of milk quality from farm to customer. Its manufacturing sites are certified to ISO9001:2000 standards and laboratory product testing is ISO7025 accredited.
Food safety and quality is said to be Fonterra’s top priority – from sourcing of high quality milk and ingredients to the processing, packing and handling of products.
Ian Palliser, Fonterra’s acting group director of food safety and quality, sees the cow as “an efficient factory that converts grass or feed to milk!”
In New Zealand, the cows are grass-fed and supplemented with maize, corn, palm kernel expeller and stored grass. Each cow produces about 4,000 litres of milk a year. Unlike in the US and European countries where the cows calve all year, in New Zealand, all the cows get pregnant and calve at the same time by late October.
The milk production season in New Zealand is from June to May and peaks from October to December, tapering off through the late summer and autumn.
Fonterra farmers who are milk suppliers need to comply with the standards set by the company such as animal health, fertilisers (for grass) and cleaning agents for milking equipment. Random testing of milk is conducted on a regular basis, Palliser said.
Milk is collected once a day from average size farms of around 400 cows or twice daily from large farms of around 1,500 cows.
“Every milk tanker is equipped to do testing at the farm before any milk is put into the tanker. Critical tests concern the temperature of the milk (which should be less than 10°C) and to ensure there are no inhibitory substances.
“If there is a problem with the milk, we don’t load it and when the milk gets to the factory, further tests are conducted.”
As a primary quality control measure, milk has to be pasteurised at 72°C for 15 to 20 seconds. During post-manufacturing, the dairy products are again subjected to a series of microbiological tests (results of which can take from a day to a week) and they cannot move from the store until tests are completed. Each year, 6.5 million tests are conducted on New Zealand milk.
Every time a milk tanker collects milk from a dairy farm, two “representative milk samples” are collected for independent testing.
Hence, every time a New Zealand farmer supplies milk, the milk is tested for its composition as well as antibiotics and bacteria, said Margeret Mallock, CEO of Milk Test NZ, an independent laboratory in Te Rapa, Hamilton.
“Farmers are imposed ‘big penalties’ if they get a positive inhibitory substance in their milk samples,” said Mallock.
Those who misbehave pay with the consequential loss of milk and the dumping of the milk. That aside, they will be subjected to tests every day for 365 days. Such are the stringent checks on milk produced to ensure dairy farmers keep to the regulations.
Milk Test NZ is the country’s No. 1 testing company to meet compliance testing. It is equipped with unique automated sorting and splitting robotic systems. Over 97% of the milk from New Zealand dairy farms are tested at this independent laboratory.
“We test and process about 25,000 milk samples each day during the peak of the dairy season from August to May,” said Mallock.
In the North Island, the samples come in refrigerated vehicles and those from the South Island are flown in. The company employs 30 staff to handle the high traffic.
Milk samples can be traced back to the farms – not individual farms, but a group of farms since milk tankers generally collect milk from a few average-size farms at a time.
Fonterra approaches sustainability and social responsibility by emphasising dairy excellence, nutrition and responsible dairy, said Tom Newitt, manager of sustainability and corporate social responsibility.
The company prides itself as a sustainable dairy industry contributing to a healthy functioning ecosystem.
“We target water quality (in the farm), water efficiency (in operations) and (20% reduction in) emission. The company also implements global animal welfare standards and community collaborations,” he said.
Its social responsibility programmes include New Zealand’s Milk for School (rollout in May 2013) which involves 1,369 schools and KickStart Breakfast (launched in 2008 and 2009) involving 620 schools and 28,000 children. Others include Yayasan Salam (to improve nutrition of children in rural Selangor) in Malaysia and ChildFund (to improve health and wellbeing of underprivileged children) in Indonesia, the Philippines and Sri Lanka.
Kim Ballinger, general manager in charge of marketing Fonterra brand, said the company’s global brand vision is to build brands to suit evolving global consumer needs of pregnant mothers, babies and seniors as well as the foodservice market.
“Anchor is the biggest brand in the company (sold in over 70 countries) while other key products are Soprole (Chile), Fernleaf, Anmum and Anlene (in Asia),” she said.
She also cited Fonterra’s innovative products, including its award-winning Mainland Noble White Cheddar Cheese (which took seven years to perfect), which is full-flavoured and yet 25% naturally lower in fat; Symbio Probalance, a rich and creamy 99% fat-free yoghurt available only in New Zealand and scientifically proven to help restore digestive balance; and beverages which combine juice and milk (in China market) and Anchor Extra Whip, a UHT whipping cream with 25% more whipped volume.
Fonterra Brands Malaysia, has continued to grow its presence to meet the country’s fast-growing demand for top quality dairy nutrition. Over the last five years, it has averaged double-digit growth in Malaysia.
Today, it has 500 staff and two ISO9001/2 certified manufacturing facilities and supply a range of consumer branded products to around 20,000 retail outlets across the country.
Its brands – Anmum Materna and Anmum Essential, Anlene, Fernleaf, Anchor, Chesdale and Perfect Italiano – are widely known and trusted by Malaysians.
Its foodservice business has also shown strong growth and today, it claims to be the market leader in out-of-home dairy in Malaysia with its Anchor, Perfect Italiano and Mainland products, used by hotels, restaurants, caterers and industrial kitchens across the country.
Fonterra’s future focus, Wrigley said, is on emerging markets “with a lot of room for growth” in China, India and Asean. The company is also looking at building milk pools (where milk is collected) in key markets such as Australia, Chile, Brazil and China to support demands.
Fonterra, he said, is “big” on foodservice (restaurants, hotels, cafes, airlines, workplaces), a NZ$1bil (RM2.8bil) segment, across 50 countries.
Products for foodservice include anhydrous milk fat, butter, ghee, milk protein, concentrates and isolates, whey protein concentrate, cheddar and specialty cheeses, milk powders, and nutritional powders.
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Some of the company’s leading brands in Australia and New Zealand are Mainland, Bega, Anchor, Tip Top and Ski. In Asia, Africa and the Middle East, the brands are Anchor, Anlene, Anmum, Fernleaf and Tatthi, with Soprole a major brand in Latin America.
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