Tuesday, November 01, 2005

Fonterra update...

Fonterra visited Melbourne Uni on 3 August 2005. It states that their research platforms include:
  • dehydration (dewatering/energy)
  • lights out manufacturing (remote operations/robotics)
  • on-line control (supply chain, yield, quality)
  • packaging (biodegradable materials)
  • cleaning (nanotechnology).
the website memo also states that:
Fonterra has committed $50M to further research
Another summary of the decision from an aussie perspective is here.

Q what is their current annual R&D budget?
Googling finds a 2002 annual report putting it at $100 million with about $5 million of public money. ignoring the salary vs investment question, this puts it's R&D budget at well below 1%. I'm not sure this yells out that innovation and high-tech products are where this company sees the future. The melbourne uni statement said they were thinking of increasing their budget by 50 million, this puts it at or just over 1% which is starting to look serious, if they ever get up to 3% (let alone 5%) then this would be start to be a very interesting player in australasia. the list above covers most of the current chemistry and engineering fields let alone the biotech angles. if they can build a culture that celebrates and supports commercialisation (easier said than done with techhies) and use that to feed back into the cycle, we might just start to see the formation of dairy-hub (the udder silicon valley?). as a scientist adrift in the world longing for a real career in australasia, i'm hoping that this gets off the ground big time. lots of my research interests would fit under the umbrella that they are thinking of, the big question remains as to how they monetize their 'geeks on a leash'.

Strangely, the 2004/2005 annual report (p58) lists their research costs as $44M, up 37% from the previous year. Barely knowing one end of a balance sheet from the other, i'd guess the discrepency between those numbers is the salary costs of a few hundred people (?). i find financial accounting to be boring at best so i'm not going to spend any more time thinking about the numbers but they do spell out 'promising'. In science, the only, ONLY, thing that counts is 'how much money are you prepared to spend?'. Anything else is a talk-fest.


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