Fonterra trims board size
Fonterra’s board has been reduced to nine - comprising six farmer-elected and three appointed directors.
China’s Ministry of Commerce has now granted anti-trust and strategic foreign investment approval for the proposed partnership.
In a statement Fonterra says further regulatory approvals are required before it proceeds to the next stage which is a partial tender offer to gain up to 20% of Beingmate.
Fonterra says it will provide further updates as the partnership progresses.
Last year Fonterra announced it was teaming up Beingmate to tap into China’s growing demand for infant formula.
Fonterra and Beingmate intend to form a global partnership to supply infant formula.
The partnership will create a fully integrated global supply chain from the farmgate direct to China’s consumers, using Fonterra’s milk pools and manufacturing sites in New Zealand, Australia, and Europe; this will lead to increase glow of Fonterra’s ingredients and branded products exported to China.
The partial tender offer to gain up to a 20% stake in Beingmate is the first phase of the JV; after gaining regulatory approvals and Fonterra satisfactorily completing the partial tender offer, Fonterra and Beingmate will set up a joint venture to purchase Fonterra’s Darnum plant in Australia and will establish a distribution agreement to sell Fonterra’s Anmum brand in China.
Fonterra chief executive Theo Spierings last year said that the partnership between two leading dairy nutrition companies will be a game changer that will provide a direct line into the infant formula market in China, which is the biggest growth story in paediatric nutrition in the world.
The infant formula market in China is worth about $18 billion today and is expected to be worth $33 billion by 2017. This growth is driven by increasing urbanisation, higher disposable incomes, a preference for premium brands, and relaxation of the one child policy.
