Fonterra's new boss says reducing the company's debt by $800 million is achievable.

Miles Hurrell has been officially installed as CEO today, having been interim boss since last August.

It comes after Fonterra last year posted a historic net annual loss of $196m.

Fonterra's gearing ratio bumped up by 11 per cent to $6.2 billion, driving the gearing ratio to 48.4 per cent to beyond the company's own comfort levels of 40 to 45 per cent.

Hurrell says that the results suggest they need to look at a potential change in direction.

He told Larry Williams that they are making good progress with their portfolio review.

"We've announced the Tip Top sale, and we're making great progress with the sale of that."

Hurrell says they are going well in China. 

However, he says one reason for their high debt is that their balance sheet has blown out in part because of troubles in Latin America and Australia.

"Latin America has been tough mainly on the back of major economic troubles in that part of the world. Australia very well documented with competition but more importantly the drought."

He says they are just seeing more competition in those markets than they expected. 

Hurrell will take home a base salary of $1.95 million, with additional short and long term incentive payments on the achievement of targets agreed with the board.

Fonterra's previous chief executive Theo Spierings took home $8 million in the 2017 financial year. Spierings exited Fonterra mid-last year.