Fonterra is imposing a "severe clampdown" on non-essential spending, freezing staff levels and planning to sell some assets and aggressively cut debt to cope with the global recession. At Fonterra's annual meeting in Palmerston North yesterday, attended by about 300 farmers, few questions were asked about its handling of the Chinese melamine-in-the-milk scandal reports Stuff. Chairman Henry van der Heyden said it was likely Fonterra would have to write off the remaining $62 million of its investment in disgraced Chinese company SanLu. Chief executive Andrew Ferrier said the cooperative would look to sell some assets but this was not related to bringing down debt levels. Fonterra has a debt to debt plus equity ratio of 57% but aims to reduce this to 45% during the next few years. "Although Fonterra's banking relationships are sound, the world we are in is so unpredictable, it pays to be prudent," Mr Ferrier said.
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