Fonterra the New Zealand Dairy giant moves into Brazil and Venezuela
Fonterra has narrowed its focus on Brazil and Venezuela through what it called a realignment of its 10-year-old Dairy Partners Americas 50/50 joint venture with international food giant, Nestle.
Under the agreements, Fonterra will take a 51 per cent controlling stake in DPA Brazil, with Nestle holding the balance. The moves will net Fonterra $96 million in the 2014/15 financial year.
Fonterra said it would, together with a local partner, acquire Nestle’s share of DPA Venezuela.
Lukas Paravicini, who joined Fonterra as chief financial officer in 2013 after 22 years with Nestle, said the moves would increase the co-operative’s strategically important markets of Brazil and Venezuela on the consumer side of the business.
“And it gives more freedom to look around the region for other opportunities that we might find,” Paravicini said.
The co-operative’s managing director of Latin America, Alex Turnbull, said the region’s economies had undergone considerable change during the past decade. “We’ve seen increased prosperity in markets like Brazil with rapid urban growth and a focus on healthy nutrition driving demand for dairy products,” he said. “A bigger stake in DPA Brazil means we will be well placed to drive our volume and value growth strategy focusing on everyday nutrition offerings.”
Fonterra’s Latin American operation drives more than 900,000 tonnes of volume per year and $3.5 billion in revenue.
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