Aug 23, Colombo: Following protests against its factory in Sri Lanka, the New Zealand dairy giant Fonterra announced Friday that it has decided to temporarily suspend the consumer operations in Sri Lanka as a precautionary measure and asked the workers to stay at home.
Issuing a statement Fonterra Co-operative Group said it has today taken the precautionary step of temporarily suspending its consumer operations in Sri Lanka because of the unstable situation at the moment.
Demonstrators protested against Fonterra products in front of its main factory in Biyagama, on Thursday demanding the government to ban all Fonterra products despite the announcement by the Sri Lankan authorities that no contaminant was found in the latest milk powder batches.
Chief Executive Officer of Fonterra Theo Spierings said the company has two immediate priorities: protecting its people, and protecting its farmer shareholders' assets.
He said the temporary suspension is a precautionary measure to ensure our 755 people working in its factory are safe.
"We have closed our plants and office in Sri Lanka, and have asked our people to stay at home," the CEO said.
"At the same time, we must do all that we can to protect our farmer shareholders' investment in Fonterra's Sri Lanka manufacturing and commercial operations."
Mr Spierings said Fonterra has provided every possible assurance to the Sri Lankan authorities about the safety and quality of Fonterra's products, and remains committed to the Sri Lankan people.
During a high level discussion with the Sri Lankan government officials, representatives of the diplomatic corps of New Zealand have assured that all milk powder shipped to Sri Lanka from New Zealand from 1st June of this year do not contain DCD.
Despite the assurance a Sri Lankan court Monday issued an order until Sept. 3, 2013 making it illegal for Fonterra to continue advertising campaigns for the dairy products and Wednesday summoned four top executives of the company to the court to face contempt charges for defying the order and distributing the supposedly tainted dairy products.
Fonterra official said recent events have made it difficult to maintain day-to-day operations, and they need to get them resolved.
"Fonterra Sri Lanka is currently subject to a court Enjoining Order which has shut down our ability to sell product, advertise it or make public statements in any way with customers or consumers in Sri Lanka," the CEO said and added that legal action is underway to get the Enjoining Order resolved.
"We are also working with Sri Lankan and New Zealand government authorities on a long-term sustainable solution for our Sri Lankan customers, communities and dairy sector," Mr. Spierings said.
Sri Lanka is one of the key markets for the New Zealand dairy industry. The New Zealand dairy industry has been providing dairy products to Sri Lanka for over 35 years.
Fonterra also provides assistance to Sri Lanka's local dairy industry. Earlier this year the Co-operative launched a Farmer Training and Education Programme to help develop dairy farming skills in the country.