Changes to Fonterra-Nestle joint venture

NIKO KLOETEN
Last updated 11:18 04/08/2014

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Fonterra and Nestle have taken the first step in a series of changes to their mega corporate alliance in Latin America.

As announced in May, Fonterra and Nestle have revised their Dairy Partners Americas (DPA) joint venture to "better reflect each company's respective strategies".

DPA was created by Nestle and Fonterra in 2003 as a 50:50 joint venture, manufacturing milk powder and manufacturing and commercialising chilled and liquid dairy products throughout Latin America.

As part of the changes, Fonterra now has a 51 per cent controlling stake in DPA Brazil, with Nestle holding the balance.
Fonterra and Nestle opened a $45 million dairy distribution centre in Brazil last year under the joint venture.

Meanwhile, Fonterra has taken over Nestle's share of DPA Venezuela, together with a local partner.

The other changes to the DPA alliance, including Nestle taking control of DPA Ecuador and the DPA milk-powder manufacturing businesses, are still subject to regulatory approval and due to be completed by the end of the year.

Fonterra's managing director of Latin America, Alex Turnbull, said the tweaks to the joint venture would give Fonterra the opportunity to "further drive our volume and value growth strategy focusing on everyday nutrition offerings".

"The changes we have made are aimed at making our businesses in Brazil and Venezuela even stronger."

Fonterra's Latin American footprint drives more than 900,000 metric tonnes of volume per year and $3.5 billion in revenue from its consumer dairy, food service and dairy ingredients.


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