Wednesday, 17 March 2021 09:27

Fonterra to end China farms, Beingmate links this year

Written by  Sudesh Kissun
Fonterra has announced it intends to end its involvement with farms Beingmate businesses in China. Fonterra has announced it intends to end its involvement with farms Beingmate businesses in China.

Fonterra hopes to end its involvement in farms and the controversial Beingmate businesses in China by the end of this year.

The co-op announced today that as part of a continuous review of its asset portfolio, it has decided to undertake a sales process for the joint venture (JV) farms in China.

Last year the co-op sold two fully-owned China farms to Inner Mongolia Natural Dairy Co for $513m.

It also announced that it had agreed to sell its 85% interest in the Hangu farm to Beijing Sanyuan Venture Capital Co Ltd. for $42m. Sanyuan has a 15% minority shareholding in the farm and exercised their right of first refusal to purchase Fonterra’s interest.

Hurrell says as with Fonterra’s own China farms, the decision to sell the JV farms is in line with the co-op’s strategy to focus on New Zealand milk.

“We expect the sales of our farms to be completed this financial year and the sale of the JV farms to be completed this calendar year.”

Fonterra has also continued to reduce its shareholding in Beingmate, which has reduced to 2.82%.

The co-op had paid $755 million for an 18.8% stake in the Chinese company as part of a joint venture partnership. It has since written down the carrying value to $204m after a string of heavy losses decimated Beingmate's market value.

Hurrell says Fonterra will continue to sell down its remaining shareholding and expects to have fully exited this investment before the end of this financial year.

“Greater China continues to be one of our most important strategic markets. We remain committed to growing the value of our Greater China business, which we’ll do by bringing the goodness of New Zealand milk to Chinese customers in innovative ways and partnering with local Chinese companies to do so.”

More like this

Winston Peters questions Fonterra divestment plan

Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.

Editorial: A new era for two co-ops

OPINION: Farmer shareholders of two of New Zealand's largest co-operatives have an important decision to make this month and what they decide could change the landscape of the dairy and meat sectors in New Zealand.

Should co-op sell its consumer brands?

OPINION: As CEO of the Dairy Board in the 1980s I was fortunate to work with a team of experienced and capable executives who made most of the brand investments that created the international consumer business Fonterra inherited. Soprole in Chile was the largest, but there were more than 20 countries where consumer marketing companies were established and Anchor and other brands were successfully launched.

Featured

'One more push' to eliminate FE

Beef + Lamb New Zealand (B+LNZ) is calling on farmers from all regions to take part in the final season of the Sheep Poo Study aiming to build a clearer picture of how facial eczema (FE) affects farms across New Zealand.

Winston Peters questions Fonterra divestment plan

Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.

National

Machinery & Products

New McHale terra drive axle option

Well-known for its Fusion baler wrapper combination, Irish manufacturer McHale has launched an interesting option at the recent Irish Ploughing…

Amazone unveils flagship spreader

With the price of fertiliser still significantly higher than 2024, there is an increased onus on ensuring its spread accurately at…

» Latest Print Issues Online

Milking It

Tough times

OPINION: Dairy industry players are also falling by the wayside as the economic downturn bites around the country.

MSA triumph

OPINION: Methane Science Accord, a farmer-led organisation advocating for zero tax on ruminant methane, will be quietly celebrating its first…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter