By Arundhati Dutta and Sameer Manekar

(Reuters) – New Zealand’s Fonterra Co-operative Group on Thursday proposed a capital structure that makes it easier for new farmers to enter the co-operative, taking forward its strategy to claw back it domestic market share.

The revised proposal will make the minimum required shareholding at the co-operative 33%. This is one share for every 3kg of milk solids (kgMS) instead of the existing mandatory requirement of 1 share for each kgMS.

To “protect farm ownership and control”, the structure will also restrict non-farmer investments in Fonterra Shareholders Fund. This fund is a portal for non-farmers looking to invest in the dairy giant.

Chairman Peter McBride stated that a capital structure with flexible shares would allow for a level playing field against competitors. Many of these foreign-backed companies don’t require farmers invest capital.

As part of its effort to simplify operations and improve its financial prospects, the Auckland-based firm had in May announced a restructuring of its capital structure.

Fonterra also revealed its long-term plan to focus its domestic operations. This included divesting Chile’s investment and looking at taking over Australia while still retaining significant ownership.

Miles Hurrell, Chief Executive Officer, stated that both of these actions are crucial to allow more focus on New Zealand milk, and also to let us free up capital which will be returned to shareholders.

According to its strategy, the dairy company expects to see a 40 to 50 percent increase in operating profit by 2030. The plan also calls for NZ$1billion (or $699.80 million) of dividends and planned sales to be made by fiscal 2024.

($1 = 1.4273 New Zealand dollars)