Participation in FrieslandCampina

Capital & interest

Part of the capital of Koninklijke FrieslandCampina N.V. and Zuivelcoöperatie FrieslandCampina U.A. is registered in the names of the member dairy farmers. Members can, within certain limits, decide on the extent to which they participate in Koninklijke FrieslandCampina N.V. The members receive a commercial interest rate on the registered capital, irrespective of the company’s results. Depending on the reservation policy, the company’s results are expressed in the performance premium for the milk supplied, the issue of fixed member bonds and addition to the general reserve.

The main types of member financing through which members participate in FrieslandCampina’s risk-bearing capital are set out below.

Zuivelcoöperatie FrieslandCampina U.A. member certificates

Dairy farmers who were members of Friesland Foods or Campina at the time of the merger (end of 2008) received a one-off issue of member certificates from Zuivelcoöperatie FrieslandCampina U.A. at the time of the merger. These member certificates are non-negotiable but, while they are members, the holders can convert all or part of their member certificates into fixed member bonds. These are non-negotiable but, like member certificates, bear interest.

FrieslandCampina fixed member bonds

Fixed member bonds are issued to the members from the company’s result (registered reserve) each year. The amount distributed as fixed member bonds depends on FrieslandCampina’s financial results and the reservation policy and is based on the value of the milk that a member dairy farmer has supplied during the previous calendar year.
A member may also own fixed member bonds converted from member certificates. Fixed member bonds are non-negotiable.

FrieslandCampina free member bonds

Members and former-members in the ‘closed group’ can hold, buy or sell interest-bearing free member bonds. Sales and purchases are made on an internal market. There are up to six trading days a year. Free member bonds are traded at a face value of €50, plus interest accrued from 1 June to the payment date. FrieslandCampina has entered into an agreement with a liquidity provider to ensure a smooth internal market. If supply exceeds demand, this party takes up bonds and when demand exceeds supply it sells the bonds in its portfolio.