Fonterra Shareholders' Fund Prospectus and Investment Statement

SECTION 1
About
Fonterra continued
Fonterra’s strategy
Early in 2012, Fonterra announced
a “Strategy Refresh”. The new
strategy focuses on balancing
Fonterra’s investment in its NZ
Milk Products business and its
established positions in Australia,
New Zealand, the Middle East and
North Africa, with higher-growth
opportunities in Asia, Latin
America, its out-of-home
foodservices business and in
advanced nutrition products.
It has seven distinct paths:
optimise the performance of
the NZ Milk Products business
Through maintaining milk supply in New
Zealand, investing in modern and efficient
plants, improving price realisation, optimising
product mix, managing risk and delivering
even better service to customers.
build and grow beyond
Fonterra’s current
consumer positions
By building on leadership positions in
consumer brands in Australia, New Zealand,
ASEAN / MENA and Chile, and investing in
high growth markets within Asia and Latin
America.
grow the out-of-home
foodservices businesses
By building on established out-of-home
foodservices capabilities internationally,
particularly in China, ASEAN / MENA and
Latin America, to meet the specialised needs
of local customers in each market, particularly
in bakeries, hotels, quick service restaurants
and cafés.
grow Fonterra’s position
in aiding mobility and
bone health
Through investment in its market-leading
Anlene brand in Asia, supported by
highly-focused product innovation and
development that supports mobility in an
aging population.
develop selected positions
in the paediatrics and
maternal categories
By building on Fonterra’s current presence
in the market for paediatric dairy products
through third party manufacturing with
multinationals and regional Asian
participants, and selectively growing sales
of Anmum paediatric and maternal dairy
products in selected markets.
selectively invest in secure in
market quality milk sources
Through targeted international farming and
milk sourcing, with China as the prime focus
to develop the international farming model.
aligning Fonterra’s business
and organisation structure
By ensuring Fonterra’s business structure
is aligned to its strategy priorities, and
utilising business service centres across
the Fonterra Group.
organisational structure
On 1 August 2012, Fonterra’s organisational
structure was re-aligned to deliver on the
strategic priorities described above. A key
change included the separation of Asia / AME
into two new business units, ASEAN / MENA
and Greater China and India, in order to focus
on these growing markets. In addition, a new
group-wide “Fonterra Nutrition” division was
formed to build the dairy nutrition portfolio
across the Fonterra Group. As a result of
these changes, certain operations were placed
under the control of new business units.
These changes include:
• transferring RD1 from NZ Milk Products
(formerly known as Standard & Premium
Ingredients) to ANZ;
• transferring international farming ventures
from NZ Milk Products to the relevant
regional business unit (primarily Greater
China and India); and
• transferring certain joint ventures and
partnerships from NZ Milk Products to
Fonterra Nutrition, including DMV
Fonterra Excipients (a joint venture with
Royal Friesland Campina) and
Dairiconcepts (a partnership with Dairy
Farmers of America).
As these changes have only recently
occurred, financial information contained in
this Offer Document (including the Fonterra
Financial Information set out in Section 4 –
Fonterra Financial Information) is presented in
respect of Fonterra’s business units that existed
prior to 1 August 2012 (except as otherwise
noted). These are NZ Milk Products, ANZ,
Asia / AME and Latam. Information in this
section is presented in respect of Fonterra’s
new business units, which are NZ Milk
Products, ANZ, ASEAN / MENA, Greater
China and India, and Latam.
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