FrieslandCampina acquires major stake in Engro Foods

Global dairy company Royal FrieslandCampina has acquired a 51% stake in Pakistan-based dairy firm Engro Foods by partnering with World Bank Group’s International Finance Corporation and the Dutch development bank FMO.

With this strategic alliance, Engro will remain a significant shareholder and partner in Engro Foods.

The transaction was approved by competition commission and other relevant Pakistani authorities.

The deal is reported to be one of the single largest private foreign direct investment (FDI) in the country in recent years, amounting to a total investment of $450m.

Royal FrieslandCampina CEO Roelof Joosten said: “The cooperation with Engro Foods will accelerate FrieslandCampina’s route2020 strategy.

“Through this well-organised and highly successful company, we will obtain a significant presence in the Pakistani dairy market in which a growing middle class is buying more processed milk.

“Engro Foods offers us a basis on which we can build further. This acquisition will contribute to the value creation for our member farmers. Also, we look forward to contribute to Pakistan’s agricultural sector through knowledge transfer based on our established dairy development programme.”

Both FrieslandCampina and Engro Foods look forward to take advantage of the conversion of the market from loose to packaged dairy consumption, which is expected to accelerate in the near future.

As part of Business Group FrieslandCampina Consumer Products Asia, Engro Foods will continue to operate under its own name.

Engro chairman Hussain Dawood said: “This is a defining moment for Pakistan. We believe this transaction will be instrumental in positioning Pakistan as an attractive investment destination for global companies and encourage others to follow.

“This partnership enables us to provide a wider array of affordable high-quality dairy products for a healthier Pakistan, especially for its younger population. Improving the wellbeing of millions of our farmers is a cause that our group has been focused on for the past five decades.

“Working with FrieslandCampina, a company owned by farmers, will help us to accelerate our work on improving productivity in the dairy sector. I am convinced that this partnership will create tremendous long-term value for our shareholders.”

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Image: Royal FrieslandCampina acquires a major stake in Pakistan’s dairy company Engro Foods. Photo: courtesy of Royal FrieslandCampina.