FSF
16/12/2015 11:05
ASSET
NOT PRICE SENSITIVE
REL: 1105 HRS Fonterra Shareholders' Fund (NS)
ASSET: FSF: Fonterra to sell Australian yoghurt dairy desserts business
16 DECEMBER 2015
FONTERRA TO SELL AUSTRALIAN YOGHURT DAIRY DESSERTS BUSINESS
Fonterra Co-operative Group Limited has today announced the intention to sell
its Australian yoghurt and dairy dessert business to Parmalat Australia Pty.
Ltd. Both parties entered into exclusive negotiations which have now
culminated in the signing of a sale agreement.
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 Co-operative's Australian business to strong and sustainable
profitability. While the sale of this business is not material in itself, it
is disclosed as it is a key part of the previously announced plans for our
Australian business.
Recently, Fonterra has:
o Announced a A$120 million investment to rebuild its factory in Stanhope, in
northern Victoria, as a state-of-the-art primary cheese manufacturing plant,
with 50 per cent extra capacity?.
o Divested its 9% stake in Bega, with the funds being re-invested into the
Stanhope cheese plant.
o Announced plans with Bellamy's Australia Ltd and China's Beingmate Baby and
Child Food Company Ltd that provide opportunity for significant growth in
nutritional volume from Fonterra Australia.
o Commissioned a multi-million dollar beverages plant at its Cobden facility,
in western Victoria, to service a 10 year partnership with Woolworths.
o Launched Fonterra's largest global brand, Anchor, in Australia.
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.
"Australia is our largest milk pool outside New Zealand, and is an integral
part of our multi-hub strategy. Our Australian operations have particular
ingredient strengths in cheese, whey and nutritionals, complemented by our
strong consumer and foodservice businesses. As a key part of our multi-hub
strategy, we are matching these strengths with the opportunities across our
100 markets," said Mr Spierings.
Fonterra Managing Director Oceania Judith Swales said Fonterra is totally
committed to the Australian dairy industry and its retail business, and the
divestment is a decisive step to lock in our competitive position in the
Australian consumer market.
"We will continue investing in programs and innovation that supports our
market-leading brands in key retail categories, including Western Star butter
and Perfect Italiano, Mainland and Bega cheeses, Anchor cream, and fresh
milk.
"Divesting the yoghurt and dairy desserts business will allow us to focus on
what we do best, so we can continue delivering a competitive milk price to
our suppliers, benefits to our customers, innovative dairy foods to our
consumers, and improved returns to our farmer shareholders and unit holders,"
concluded Ms Swales.
All Fonterra's Echuca and Tamar Valley employees in the yoghurt and dairy
dessert business have received offers of employment from Parmalat.
ENDS
Note: currency is New Zealand dollars unless otherwise stated.
For further information contact:
Simon Till
Director Capital Markets
Phone: +64 21 777 807
End CA:00275214 For:FSF Type:ASSET Time:2015-12-16 11:05:28
