A bright spot is emerging in the economic gloom with New Zealand's largest company Fonterra saying it is in good financial heart and expects to remain so during the Covid-19 pandemic.
Photo: RNZ / Rebekah Parsons-King
Chief executive Miles Hurrell told RNZ that the global dairy giant, owned by its 10,000 farmers, was expecting the milk price to hold in the current range of $7-7.60 per kilogram of milk solids.
Fonterra was not expecting job losses or significant drops in revenue and was even seeing demand spike for a number of its products.
"Effectively what you're seeing here in New Zealand play out with stockpiling of products in supermarkets - we've seen that play out across a number of our markets around the globe."
Demand was also holding up well for the ingredients side of the business, which mainly supplies multinational food companies.
While Fonterra was being hit by reduced demand from restaurants, cafes and other places of out-of-home consumption, even that was starting to bounce back in its vital Chinese market.
"Some of those big, fast food outlets such as Starbucks, about 90 percent of their stores are back open again, albeit on lower foot traffic, but we're starting to see some sense of normality."
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Hurrell said he felt "very confident" about the milk price until at least the middle of the year and the company had not experienced issues with its supply chains.
Fonterra employs about 20,000 people around the world and so inevitably some of those would contract Covid-19.
Hurrell confirmed some Fonterra staff have tested positive for Covid-19 but would give few details, only saying they were being cared for in isolation and were not impacting on the business.
"We have had some impacted people in our business. We've got a very small number that have been impacted and [we] are supporting them the best we can," he said. "It may be New Zealand or maybe further afield," he said when asked whether there were cases among its 12,000 New Zealand staff.
Hurrell said that as a food company the co-op already had strong hygiene standards in its factories. "What we're doing now is ramping up things like temperature checks on arrival in our factories."
Fonterra has come under fire for its high executive pay in the past but Hurrell said there were no plans to trim salaries or staff numbers as there had already been cutbacks over the last two years.
"We made some significant staff cuts in the last couple of years. We had no pay rises last year and no bonuses last year. So, our business went through a significant reset."