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Fonterra To Delay Pay Despite Strong Profit

New Zealand’s largest company made NZ$409 million in the six months to the end of January, compared with NZ$183m in the same period a year ago – an increase of
24 Mar 2016 11:25
Fonterra To Delay Pay Despite Strong Profit
Fonterra

New Zealand’s largest company made NZ$409 million in the six months to the end of January, compared with NZ$183m in the same period a year ago – an increase of more than 120 per cent.

Late last year, it extended from 30 days to 90 the time it took to pay firms and asked them to cut their charges by 10 per cent.

Some suppliers said the move was crippling and warned of a backlash.

Mr Key said Fonterra was using its strong balance sheet to support farmers through dividends but it should also deliver to its suppliers.

“Of course it has been a very, very tough time for dairy farmers, it’s a very strong result for Fonterra,” Mr Key said.

“On one level that’s good because you want the organisation to be strong. I think what Fonterra are doing though is trying to relieve some of that pressure and use their own balance sheet to support those farmers through dividends and the likes.

“You can’t really deliver a result like that and not follow through and make sure that people are paid on time.”

Fonterra said today it had made up to NZ$70m by extending the time it took to pay its suppliers.

>RNZI

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