Fonterra to review dairy JV with Britannia

Sanjay Khosla, the newly appointed managing director of New Zealand Milk, is a man in a hurry.

Ever since he joined the $2.5 billion consumer dairy business of the Fonterra Co-operative Group, one of the world's largest dairy companies, in August 2004, he has been touring countries where the company has a presence.

Khosla, who is now in India, says: "I am here on a very short trip. The agenda is to review the business here. "The Indian operations are relatively small within the overall scheme of things."

In 2002, Fonterra acquired a 49 per cent stake in the dairy business of the Nusli Wadia-controlled Britannia Industries. The joint venture, Britannia New Zealand Foods, has been going through some turbulence with the company withdrawing from the plain and flavoured milk business and seeing changes at the management level.

Anupam Dutta, general manager, marketing, from liquor company UDV India has replaced Pavan Malik, an old time Britannia man who quit the company.

Khosla, a 27 year Unilever veteran who has been based in India, London and Europe (his last stint was as head of the beverages division), is the only Indian in the apex committee of Fonterra. He declines to comment on the future plans of the Rs 225 crore Britannia New Zealand Foods.

"The immediate priority is to prune the number of brands (over 100) within New Zealand Milk's portfolio, something similar to Unilever's power brand strategy," says Khosla. The company refers to its pruning strategy as 'Grin'"" growth through innovation.

This will be followed by allocating resources in terms of building brands and research and development. The company also plans to focus on the food service business and the integrated supply chain (the cow-to-customer value chain).

Once Khosla has met these targets he plans to exploit markets that involve large investments and revenues. "We will then review our relationships in certain countries, including India. After this we will take a decision on whether to introduce our brands through the JV or go it alone here," he explains.

Khosla, a electrical engineer from the Indian Institute of Technology, New Delhi, went on to complete a Harvard University advanced management programme in 1998.

He is also on the board of education IT company NIIT. Work consumes a lot of his time and he hardly finds time to play a game of golf and tennis.

The Asian region contributes around $700 million to its global revenues and the largest market for New Zealand Foods is Sri Lanka. "Strange but true, a country with a not so large population is one of our biggest market in this region," Khosla adds. His next destination? The island country.