Fonterra Co-operative Group Ltd and Parmalat Australia Pty Ltd last month signed a sale agreement that would see Fonterra’s Australian yoghurt and dairy dessert business change hands.
The transaction, which is conditional on regulatory and other approvals, is expected to be completed in the first half the of the 2016 calendar year.
The divestment of its Australian yoghurt and dairy desserts business, which includes manufacturing sites at Tamar Valley and Echuca, as well as its Australian yoghurt and dairy dessert brands, is part of a comprehensive plan to return the cooperative’s Australian business to strong and sustainable profitability.
Recently, Fonterra announced a $120 million investment in a cheese manufacturing plant in Stanhope, northern Victoria, divested its nine per cent stake in Bega, announced plans with Bellamy’s Australia for significant growth in nutritional volume from Fonterra Australia, commissioned a multimillion dollar beverages plant at its Cobden facility in western Victoria to service a 10-year partnership with Woolworths, and launched Fonterra’s largest global brand, Anchor, in Australia.
Fonterra Chief Executive Theo Spierings said these changes were the result of driving a clear strategic plan to transform the Australian business to deliver stronger returns to farmer shareholders and unit holders.
“We are focusing on areas where we can win in a highly competitive market, and that means optimising our product mix and streamlining operations to match, and investing in higher value-add products that will deliver the best returns for our farmer shareholders and unit holders,” he said.
All Fonterra’s Echuca and Tamar Valley employees in the yoghurt and dairy dessert business have received offers of employment from Parmalat.