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Fonterra, Chinese Firm Plan Partnership To Meet China’s Growing Infant Formula Demand

Partnership To Use Fonterra’s Milk Pools, Manufacturing Sites In New Zealand, Australia, Europe; Fonterra To Boost NZ Processing Capacity

Wellington, New Zealand—Fonterra and Beingmate, a leading Chinese infant food manufacturer, announced this week that they intend to form a global partnership to help meet China’s growing infant formula demand.

The partnership will create a fully integrated global supply chain, from the farm to China’s consumers, using Fonterra’s milk pools and manufacturing sites in New Zealand, Australia and Europe.
The partnership will be achieved in two phases. Fonterra will shortly start the process to issue a partial tender offer to gain up to a 20 percent stake in Beingmate.

After gaining regulatory approvals and Fonterra satisfactorily completing the partial tender offer, Fonterra and Beingmate will set up a joint venture to purchase Fonterra’s Darnum plant in Australia and will establish a distribution agreement to sell Fonterra’s Anmum brand in China.

Theo Spierings, Fonterra’s chief executive, said the partnership between the two companies will be a game changer that will provide a direct line into the infant formula market in China, which he called the biggest growth story in pediatric nutrition in the world.

“By working together with Beingmate, we will strengthen our infant formula brand presence in China and link China to high quality ingredients from New Zealand, high value pediatric products made at Darnum in Australia, and whey specialty ingredients manufactured at our new plant in Heerenveen in the Netherlands and in alliance with Dairy Crest in the United Kingdom,” Spierings said.

“This will be another milestone in our strategy to create additional demand for ingredients and high-value pediatric and maternal nutrition products made from our New Zealand milk, complemented by milk drawn from our other international milk pools,” Spierings continued. “China is our number one market and the proposal to join forces with Beingmate will be an important building block in Fonterra driving volume and value, and taking a step forward in terms of being a globally relevant cooperative.

“Our partnership with Beingmate will show the benefits of an integrated and secure supply chain, starting in New Zealand — our number one milk pool — where we are fast-tracking investment in milk processing capacity to Send more more information