Fonterra temporarily suspends operations in Sri Lanka due to 'unstable situation at the moment' surrounding questions about safety of its products

Nevin Barich

AUCKLAND, New Zealand , August 23, 2013 (Australian Associated Press) – Fonterra has temporarily suspended its consumer operations in Sri Lanka, closing its plants and office, and telling workers to stay home.

The precautionary measure has been taken due to the "unstable situation at the moment," the dairy giant announced on Friday.

Chief executive Theo Spierings says Fonterra's priorities are to protect its people and its farmer shareholders' assets.

"The temporary suspension is the right thing to do. It is a precautionary measure to ensure our 755 people working there are safe. We have closed our plants and office in Sri Lanka, and have asked our people to stay at home," he 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 had provided every possible assurance to the Sri Lankan authorities about the safety and quality of its products.

"Recent events, however, have made it difficult to maintain day-to-day operations, and we need to get them resolved."

A court order has been imposed on Fonterra to ban it from selling product, advertise or make public statements in Sri Lanka.

Legal action has been taken to try to resolve the situation.

This follows claims by Sri Lankan authorities that traces of the fertiliser chemical dicyandiamide (DCD) have been found in some product, which Fonterra and New Zealand scientists dispute.

AAP sar/nb/cdh

(c) 2013 Australian Associated Press

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