Date
24 August 2017
A Fonterra farm in Tangshan in northern China's Hebei province. Photo: Bloomberg
A Fonterra farm in Tangshan in northern China's Hebei province. Photo: Bloomberg

Fonterra to buy 20% stake in Beingmate

New Zealand dairy giant Fonterra plans to acquire a 20 percent stake in Beingmate, one of China’s biggest infant formula makers, BBC News reported.

“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,” according to Fonterra.

China relies on New Zealand for almost all its imports of milk powder.

Under the planned partnership, Beingmate will set up a joint venture to buy a Fonterra plant in Australia. Beingmate would also distribute Fonterra’s popular Anmum brand on the mainland.

Fonterra, the world’s largest exporter of dairy products, already sells its formula milk powder in China, but a tie-up with Beingmate will give it a much better distribution network, the BBC said.

Theo Spierings, Fonterra’s chief executive, said the partnership would be a “game changer” and that it would provide the New Zealand firm with “a direct line into the infant formula market in China”.

He also said Fonterra would work with Beingmate “to evaluate mutual investments in dairy farms in China”.

China’s infant formula market is worth about about US$15.05 billion, and could grow to US$27.5 billion by 2017, according to Fonterra.

The country has resorted to importing much of its dairy food needs after a tainted milk formula scandal in 2008 killed six babies and made some 300,000 infants ill, the report said.

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CG

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