Fonterra’s China deal a step closer

Another box has been ticked in plans to establish a deal between Fonterra and Chinese company Beingmate that will allow the two company’s to purchase Fonterra’s Darnum plant.

Fonterra has welcomed the next step in sealing the global partnership with Beingmate Baby and Child Food Company that will establish a joint venture to purchase the co-operative’s Darnum plant.

The joint venture will manufacture nutritional powders, including infant formula and other nutritional milk powders at Darnum for Fonterra and Beingmate and other customers.

Chief executive Theo Spierings said China was a key strategic market for Fonterra, and the global partnership with Beingmate provided significant growth potential for both companies.

“The partnership will create a fully integrated global supply chain from the farm gate direct to China’s consumers, using Fonterra’s milk pools and manufacturing sites in New Zealand, Australia, and Europe.

“By working with Beingmate, we are creating additional demand for ingredients and highvalue paediatric and maternal nutrition products made from our New Zealand milk, complemented by milk drawn from other international milk pools.

Mr Spierings said the Beingmate board’s approval was a further important step in the partnership.

“It is also another milestone in our strategy to increase the volume and value of products we export to China.

Beingmate will own 51 per cent of the joint venture and Fonterra will retain a 49 per cent stake, and run the plant operation.

“Our partnership with Beingmate is already strengthening the presence of our Anmum infant formula brand. Distribution through Beingmate is underway, with the first shipments landed in China in June.

“Beingmate has an extensive distribution and sales network with significant growth potential and the company continues to pursue a leading position in the China infant formula market,” Mr Spierings said.

The Beingmate board’s approval will be put to a vote of Beingmate shareholders on November 16.

In August last year, Fonterra and Beingmate announced they intended to form a global partnership to help meet China’s growing demand for infant formula. In March this year Fonterra acquired 18.8 per cent of Beingmate.