increase font size
In 2015, Fonterra invested $750 million in the infant formula firm, Beingmate.
Fonterra’s disastrous investment in Chinese baby food company, Beingmate could soon come to an end.
The co-op is selling its stake in portions after failing to buy a buyer for the entire shareholding.
Subject to demand for the shares, under the Shenzhen Stock Exchange market rules it is only possible to sell up to 1% every 90 days directly on the exchange, or sell up to 2% in a single block every 90 days. Trades greater than 5% can be made to an individual party in an off-market transaction.
Fonterra chief executive Miles Hurrell says from here, “it’s about making pragmatic decisions to get the best outcome for the co-op from our holding in Beingmate.”
In 2015 the dairy giant invested $750 million in the infant formula firm, however, the investment failed to live up to expectations.In 2017 it wrote off the investment to the tune of $439m. Fonterra paid $3.92/share: based on current trading, the shares are worth only $1.08 each.
Fonterra also wound back its partnership with Beingmate: bringing distribution of its popular Anmum baby formula back in-house and ending the Australian joint venture involving its Darnum plant.
Fonterra still has a multi-year agreement with Beingmate to sell ingredients.
Hurrell says the decision to sell Beingmate shares is part of Fonterra’s three-point plan to turn around the business.
“One aspect of this plan was to take stock of our business. As part of this, we have re-evaluated every investment, major asset and partnership to ensure they still meet the cooperative’s needs today.
“This started with a strategic review of our relationship with Beingmate, which has been disappointing.”
Hurrell reiterated Fonterra’s commitment to the Chinese market.
“China will always be one of our most important markets. We’ve got a strong business there and are still very much focused on the areas in China where we can succeed.”
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.
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.
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.
Fonterra has delivered a fifth straight year of record organic milk price for farmer suppliers.
Fonterra says favourable weather conditions supporting pasture growth is boosting milk production.
Like many manufacturers around the world, European agricultural machinery and tractor manufacturers are currently operating in a difficult market environment. But they are heading to the world’s largest agricultural machinery event in Hanover next month with a degree of cautious optimism.
Established in 2021, the John Deere Technician of the Year Awards champion the important contribution parts and service technicians make to the Australian and New Zealand agriculture, construction and forestry industries.
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.
New Zealand is closer to eradicating bovine TB than ever before, but possums remain a threat, says Beef + Lamb New Zealand.
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.
The ACT Party says media reports that global dairy giant Nestle has withdrawn from the Dairy Methane Action Alliance shows why New Zealand needs to rethink its approach to climate.
OPINION: Dairy industry players are also falling by the wayside as the economic downturn bites around the country.
OPINION: Methane Science Accord, a farmer-led organisation advocating for zero tax on ruminant methane, will be quietly celebrating its first…
