Fonterra and its Chinese business partner plan to “unwind” a joint venture they had in Australia. A Fonterra spokesman said it had reached a provisional agreement on key terms to unwind its Darnum joint venture with Beingmate…Full Article: Stuff Limited Dec 2018

Key Point

  • In 2006, Fonterra acquired the Darnum factory in Victoria, Australia. It was originally established by Bonlac Foods in July 1997.

ChinaAg Comments

  • In January 2018, Beingmate Baby & Child Food (SHE:002570) forecasted losses for 2017 rose from CNY 350-500 million to CNY 800 million-CNY 1 billion.
  • In August 2017, Beingmate announced it forecasted to lose USD 70 million during the first half of 2017. Originally the company projected a profit, but now had to sell off some dairy assets.
  • In July 2017, China’s Beingmate informed the Shenzhen Stock Exchange it would spin off its Heilongjiang Province-based subsidiary, Beingmate Anda Dairy. At the same time, the chairman of Beingmate denied claims of insider trading, however the Shenzhen Stock Exchange had ordered Beingmate to disclose all stock transactions made by company executives over the last 90 days. Over the past year, the Beingmate’s vice-chairman, chief financial officer and deputy general manager have all resigned.
  • In October 2016, law enforcement officials in Shanghai arrested 19 individuals for selling approximately 300 MTs of expired infant formula milk powder. Roughly 200 MTs of the expired Fonterra milk powder was repackaged and resold (via wholesale markets and e-commerce sites) in Shanghai, and in the provinces of Jiangsu, Henan, and Qinghai.
  • In July 2016, Fonterra’s Chinese business partner, Hangzhou’s Beingmate, announced profit losses relating to the April 2016 milk powder scandal. Beingmate had projected a NZ$21 million profit, but revised this figure to a NZ$44.5 million to NZ$48 million loss in the wake of a counterfeit infant formula scandal.
  • In April 2016, a Beingmate Baby & Child Food authorized dealer was found selling fake/counterfeit Beingmate (China), Abbott Laboratories (USA), and Vitacare (New Zealand) infant formula products. The arrested dealer was authorized to sell products from Beingmate Baby & Child Food Co. Ltd., which is based near Shanghai in Hangzhou. From August 2014 to May 2015, the Beingmate-authorized dealer repackaged high-priced branded products with lower-priced product, and then sold the counterfeit products to retailers in Zhengzhou (Henan Province) and Hefei (Anhui Province).
  • In October 2015, Fonterra and Beingmate approved the establishment of an infant formula joint-venture.  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.
  • In March 2015, Fonterra purchased an 18.8% stake in Beingmate Baby & Child Food. According to the Fonterra’s Chief Executive, the Auckland-based dairy company plans to invest NZD 1.5 billion (USD 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 (USD 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).
  • 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 Baby & Child Food (SHE:002570) 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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