NZ/Sri Lanka agree way forward on dairy issues

The New Zealand and Sri Lankan governments have agreed to work toward a Dairy Sector Cooperation Agreement following a one day visit to Colombo by Foreign Affairs Minister Murray McCully.

The visit followed the serious difficulties Fonterra has experienced in that market over recent weeks and the temporary closure of its Sri Lankan operations.

Mr McCully and Fonterra Chairman John Wilson met Sri Lankan Economic Development Minister Basil Rajapaksa to discuss progress in resolving the difficulties and future opportunities to expand cooperation in the dairy sector.

“Sri Lanka is keen to substantially build its domestic capacity in the dairy sector. Mr Rajapaksa clearly understands the world-class expertise and experience that Fonterra can bring to that. He was very interested in hearing how Fonterra might be able to assist. We took the opportunity to underline the greater certainty that Fonterra will need in the Sri Lankan market," Mr McCully says.

“The Minister and I agreed that our governments will work toward a Dairy Sector Cooperation Agreement, which we hope to see signed a little later this year. This will set out the ways both governments can support the growth of Sri Lanka’s dairy sector, and thereby assist in creating a more certain environment in which Fonterra can make a broader contribution to the sector’s development.”

Mr McCully also held talks with Sri Lankan External Relations Minister G L Peiris and met Sri Lankan President Mahinda Rajapaksa, along with the Health Minister and senior officials.

“There is still considerable work to do to create greater certainty for our dairy trade in Sri Lanka. I believe we have established with the Sri Lankan Government a more positive basis for taking the relationship forward,”