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.”
OPINION: There is zero chance that someone who joined Fonterra as a lobbyist, then served as a general manager of Fonterra's nutrient management programme, and sat on the board of Export NZ, a division of lobbyist group Business New Zealand, doesn't understand that local butter (and milk and cheese) prices are set by the international commodity price.
Kiwis love their butter, and that's great because New Zealand produces some of the best butter in the world. But when the price of butter goes up, it's tough for some, particularly when many other grocery staples have also gone up and the heat goes on co-operative Fonterra, the country's main butter maker. Here the co-op explains why butter prices are so high right now.
An A$2 billion bid for Fonterra's Oceania business would be great news, according to Forsyth Barr senior analyst, equities, Matt Montgomerie.
The world's largest dairy company may be in pole position to acquire Fonterra's Australian assets.
Over 85% of Fonterra farmer suppliers will be eligible for customer funding up to $1,500 for solutions designed to drive on-farm efficiency gains and reduce emissions intensity.
One of New Zealand’s largest fertiliser plants could be forced to shut down for four months as uncertainty looms over gas supply.
Federated Farmers North Canterbury president Bex Green says two public meetings held this week should have made it loud and clear that rural families and businesses are concerned about proposed staffing changes at NZ Police.
The Environmental Protection Authority (EPA) is consulting on a proposal to ban weedkillers containing chlorthal-dimethyl (DCPA).
August 6 marks Farm Worker Appreciation Day, a moment to recognise the dedication and hard mahi of dairy farm workers across Aotearoa - and DairyNZ is taking the opportunity to celebrate the skilled teams working on its two research farms.
OPINION: The Government has been seeking industry feedback on its proposed amendments to a range of Resource Management Act (RMA) national direction instruments.
A Taupo company says it's the first to bring CO₂-powered water heating technology to New Zealand dairy sheds, helping farmers cut energy costs by up to 85%.
OPINION: Sydney has a $12 million milk disposal problem.
OPINION: Canterbury milk processor Synlait's recovery seems to have hit another snag.
