Fonterra plans to divest JV farms in China

New Zealand-based dairy co-operative Fonterra has decided to offload its joint venture (JV) farms in China, as well as its remaining stake in Chinese baby food manufacturer Beingmate Baby & Child Food Company.

According to the company, the move is part of its continuous asset portfolio review process.

Fonterra first announced plans to divest its stake in Beingmate in August 2019.

As of 31 January, Fonterra held a 3.94% stake in Beingmate and it now holds a 2.82% stake in the Chinese firm.

The company said that it will continue to sell down its remaining stake and plans to divest the entire shareholding in the company before the end of this financial year.

Fonterra chief executive Miles Hurrell said: “We expect the sales of our farms to be completed this financial year and the sale of the JV farms to be completed this calendar year.”

Hurrell explained that the decision to divest Chinese JV farms is in line with the cooperatives strategy to focus on New Zealand milk.

Fonterra made these announcements in its 2021 interim results, which showed that the co-operative had a positive first half, resulting in a total group normalised EBIT of $684m.

Hurrell added: “As shown through our results today, Greater China continues to be one of our most important strategic markets.

“We remain committed to growing the value of our Greater China business, which we’ll do by bringing the goodness of New Zealand milk to Chinese customers in innovative ways and partnering with local Chinese companies to do so.”