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Fonterra's Otago plant to switch to renewable energy

New Zealand-based Fonterra Co-op Group Ltd. said Aug. 10 that its Stirling site in Otago will make the transition toward renewable energy from coal.

Fonterra said the move will reduce its coal usage by more than 9,700 tons annually.

The company added that it will no longer mine coal, saying it already surrendered its coal mining permit in Mangatangi and divested almost half of the land it acquired for coal mining.

The dairy group also announced other sustainability measures, such as switching to co-firing biomass at its Brightwater site beginning November, cutting groundwater use by 70% at its Darfield plant, and launching a water recycling scheme at its Pahiatua site.

In a separate release, Fonterra updated its normalized EPS and dividend guidance.

The company said it is still expecting normalized EPS to be about 25 cents to 30 cents, but it noted that the actual EPS may come in at or slightly below this range. In addition, Fonterra said it is likely that the full-year dividend will be just the 10 cents already paid in April.

"Our forecast performance is not where we expected it would be. While the numbers are not finalized, our margins were less than we forecasted right across our global ingredients and consumer and foodservice businesses," Chairman John Monaghan said in a statement.

The company also lowered its farmgate milk price, or the price it pays farmers, to NZ$6.70 per kilogram of milk solids from NZ$6.75.