New Zealand-based dairy giant Fonterra is exploring an initial public offering (IPO) and potential sell-off of its international businesses, including its Sri Lanka operations, to shift focus from retail sales. The Sri Lanka unit, which includes strong brands like Anchor and Raththi, reported a gross profit of 106 million New Zealand dollars in 2024. The IPO decision will be assessed through investor roadshows across New Zealand, Australia, and Asia.
Fonterra, one of the world’s largest dairy cooperatives, has named its downstream consumer business Mainland Group in preparation for a potential IPO. The company has appointed a Chief Executive Officer and Chief Financial Officer for the division ahead of the listing decision.
Sri Lanka’s Strong Performance in 2024
Fonterra’s Sri Lanka operations have shown strong financial growth, reporting a gross profit of 106 million New Zealand dollars ($65.5M USD) in 2024, up from 90 million NZD ($55.6M USD) in 2023. This marks a significant recovery from 43 million NZD ($26.5M USD) in 2022, a period impacted by the devaluation of the Sri Lankan rupee.
The company’s Anchor and Raththi milk powder brands, along with yoghurt and foodservice products, have played a major role in driving profitability in the Sri Lankan market.
Investor Roadshow and IPO Plans
To assess investor interest, Mainland Group is conducting a roadshow across New Zealand, Australia, and Asia, led by CEO-elect René Dedoncker and CFO-elect Paul Victor. The goal is to evaluate the “merits and value” of an IPO versus a direct sale to third-party buyers.
We are pleased to be making progress in both the potential trade sale and IPO processes and will continue to keep our farmer shareholders, employees, and the market updated on milestones.”
Miles Hurrell, CEO of Fonterra
Balancing Long-Term Strategy
Fonterra’s decision will weigh three key objectives:
- Maximizing long-term value for farmer shareholders.
- Strengthening Fonterra’s competitive edge in dairy ingredients and foodservice.
- Expanding international market reach for high-quality New Zealand dairy products.
The final outcome of the IPO or sale will depend on investor interest and market conditions in the coming months.
