New Zealand dairy giant Fonterra on Thursday [29 October 2015] welcomed moves to establish a joint venture with a major Chinese infant food maker in Australia. Fonterra Cooperative Group Ltd. confirmed the board of Beingmate Baby and Child Food Company Ltd. had formally approved a joint venture to purchase Fonterra’s Darnum plant in the Australian state of Victoria. Fonterra chief executive Theo Spierings said China was a key strategic market for Fonterra, and the partnership would create a fully integrated global supply chain from the farm gate direct to China’s consumers, using Fonterra’s milk pools and manufacturing sites in New Zealand, Australia, and Europe…Full Article: Oct 2015

Key Points

  • As part of the JV, Beingmate would own a 51% stake (Fonterra 49%) in Fonterra’s Darnum factory. Additionally, Beingmate would distribute Fonterra’s Anmum infant formula brand within mainland China.
  • In June 2015, Fonterra exported its first shipment of Anmum infant formula to mainland China.

ChinaAg Comments

  • In March 2015, Fonterra purchased an 18.8% stake in Beingmate Baby & Child Food Co Ltd. At the same time, Fonterra’s Chief Executive announced plans to invest NZ$1.5 billion (US$1.13 billion) in China and boost its production capacity to 1 billion liters by 2020.
  • In January 2015, China’s Ministry of Commerce approved Fonterra‘s request to purchase a 20 percent stake in Beingmate.
  • In August 2014, Fonterra announced plans to purchase a 20% stake (US$467 million) in Beingmate (based in Hangzhou, Zhejiang Province). Beingmate in return would hold a 51% stake in Fonterra’s Gippslands milk powder factory in Victoria, Australia (near Melbourne).
  • In April 2013, Fonterra stated it hoped to export its infant formula (e.g. Anmum Infant and Follow-On Formula) to mainland China by mid-2013. As of April 2013, Fonterra managed two milking farms in Hebei province and planned to open an additional three farms shortly thereafter. Fonterra intended to have a Chinese milk production capacity of 1 billion liters per year by 2018.
  • Established in 1992 and headquartered in Hangzhou, Zhejiang province, Beingmate produces and distributes infant food including milk substitutes, weaning foods and dietary supplements. The company also supplies toiletries, baby beddings, strollers, textiles and children’s toys.

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