NZ dairy giant in Nestle tie-up

By Phil Boeyen, ShareChat Business News Editor

Thursday 30th August 2001

Newly formed local dairy giant Fonterra is partnering with the world's biggest food company, Nestle, in North, Central and South America.

The companies say the joint ventures are subject to due diligence but will cover a wide range of dairy products, such as chilled refrigerated milk foods and beverages under existing brands. Infant formula, evaporated and condensed milks, certain speciality products, cheese and butter are not covered by the alliance.

The joint ventures will be managed by senior executives from both founding partners of the alliance and will report to a joint supervisory board.

The partners say they envisage increasing use of fresh milk, sourced from countries in which the joint ventures will operate, and ingredient products sourced from New Zealand.

Nestle says Fonterra will bring universally-recognised expertise in the development of dairy farming, in livestock and milk technologies, and in large-scale milk procurement, processing and management to the alliance.

Fonterra boss Craig Norgate says the alliance will be in a part of the world that will deliver the strongest growth in demand for dairy products over the next five years and with a partner that is widely recognised as the industry leader for branded products.

"Our two companies will complement each other in what is without doubt New Zealand's biggest ever commercial deal. It will be a partnership of equals which would not have been possible without the restructuring of our industry and the creation of Fonterra."

Comments from our readers

No comments yet