What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
The start-up is a next step in Fonterra and DSM's long-standing joint development relationship, which started in 2019 to build a comprehensive understanding of how to use precision fermentation science and technology to produce proteins similar to those found in dairy.
To date, this work has created valuable intellectual property for which Fonterra and DSM have filed patents. The new start-up company will enable the acceleration of commercial product solutions utilising this intellectual property, while continuing to focus on further precision fermentation research and development.
Fonterra and DSM are also collaborating to reduce on-farm greenhouse gas (GHG) emisions, by exploring applications for DSM's methane-inhibiting Bovaer technology in the New Zealand pasture-based farming system.
Fonterra's chief innovation and brand officer, Komal Mistry-Mehta, says the new start-up is an exciting opportunity to combine DSM's world-leading expertise in precision fermentation science and technology with Fonterra's world-leading dairy science and technology.
"With fermentation-produced proteins having a wide array of potential applications for customers and consumers, this partnership aligns well with the co-op's strategy to be a leader in dairy innovation and science.
"By exploring the opportunities of nutrition science solutions, we can unlock the growth potential of our advanced specialty ingredients and play more boldly in this category.
"Dairy nutrition will always be our core strength, now and into the future, and there will continue to be strong demand for our sustainable, pasture-based dairy. At the same time, we are conscious that preferences of some consumers are evolving, and we believe proteins produced with emerging technologies can work alongside our dairy products.
"With continued population growth, there will be a role for both dairy and other sources of nutrition in feeding the world's population - they offer choice and they are complementary."
