Mead Johnson, SanCor join forces in South America

Mead Johnson Nutrition, a US-based manufacturer of paediatric nutrition products, and SanCor Cooperativas Unidas, an Argentinean dairy cooperative, have established a joint venture to develop paediatric nutritional products for infants and children in the Southern Cone of South America.

The new joint venture will be 80% owned by Mead Johnson, which will invest ARS850m ($196m) to gain the share, while the rest will be held by SanCor.

The joint venture will develop, produce and market paediatric nutritional products under the SanCor Bebé brand, which holds the leading position in the Argentine market, for Southern Cone markets, including Argentina, Chile, Paraguay, Uruguay and Bolivia.

Mead Johnson will provide clinical research, proprietary formulas and product innovation for the joint venture, while SanCor will offer its local market knowledge and manufacturing capabilities.

SanCor board of administration chairman Oscar Carreras said that with this transaction, Mead Johnson strengthens its presence and growth potential in South America, while SanCor will be able to leverage its manufacturing base and continue exploration of business opportunities in other promising categories.

The joint venture will manufacture its products at SanCor’s existing facilities in Argentina.

Mead Johnson Nutrition chief operating officer Kasper Jakobsen said that SanCor’s manufacturing expertise is recognised globally and it has been able to establish Bebé as the number one brand in Argentina.

"We are excited about the potential for this venture to accelerate our growth in these key markets and to benefit local babies and children," Jakobsen added.

Mead Johnson said that it will begin to consolidate the joint venture into its overall financial statements beginning with the first quarter of 2012.

SanCor, which produces milk-based products such as milk powder, UHT milk, refrigerated milk, flavoured milk, creams, infant formula products, had a turnover in the infant formula and children’s growing-up milk categories of about ARS300m ($69m) in 2011.

 

Image: Mead Johnson will provide clinical research, proprietary formulas and product innovation, while SanCor will offer its local market knowledge and production capabilities for the JV. Photo: Mead Johnson