Fonterra cuts won't hurt us: ViaLactia CEO

New Zealand dairy cooperative Fonterra this week announced that it was to cut research funds to its biotechnology subsidiary ViaLactia by 40 per cent -- about NZ$5 million. But ViaLactia CEO Dr Colin South said the impact of the cuts within NZ would be minimal.

ViaLactia contracts out about 50 per cent of its research to 23 organisations in 11 other countries, including Australia, India, the US, Russia and India.

Within NZ, ViaLactia funds work at three Crown Research Institutes -- AgResearch, HortResearch, and Crop and Food Research -- and at the University of Auckland and Christchurch's Lincoln University. It also sponsors research by the Livestock Improvement Corporation (LIC), through a joint venture, BoviQuest. South said retrenchments in those projects were unlikely.

The company said it would concentrate its research on projects that it believed could deliver a direct return to Fonterra and its farmer shareholders.

It has retrenched five scientists and two administrators in its ryegrass genetics program, which would have benefited all pastoralists in the dairy, sheep and deer industries.

ViaLactia's clover genetics research will not be reduced. It is co-funded by all pastoral sectors through the Pastoral Genomics consortium, which includes Meat NZ, AgResearch and DeerResearch, as well as ViaLactia. Its cattle genetics research will also be maintained, through the BoviQuest partnership.

Fonterra represents about 95 per cent of all NZ dairy farmers, and even after the cuts, ViaLactia (whose name is taken from the Latin for Milky Way) still has one of the biggest research budgets in New Zealand's biotechnology industry.

Colin South discussed his company's research programs with Australian Biotechnology News during a tour sponsored by New Zealand Trade and Enterprise in March. Read it in the Interviews section.