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- New Zealand dairy company Fonterra (FSF) will be selling its China farms for a total of $555 million
- Inner Mongolia Natural Dairy Co. will purchase Fonterra’s farming hubs in Ying and Yutian for $513 million
- Further, Fonterra will sell its 85 per cent interest in its Hangu farm to Beijing Sanyuan Venture Capital Co. for $42 million
- CEO Miles Hurrell claims these sales will allow the company to focus on New Zealand milk
- The sales are expected to be completed within this financial year and Fonterra will use the money to reduce debt
- Fonterra has ended the day a slight 1.08 per cent in the green with shares trading for $3.76 each
New Zealand dairy company Fonterra (FSF) will be selling its China farms for a total of $555 million.
China Youran Dairy Group’s subsidiary, Inner Mongolia Natural Dairy Co., will purchase Fonterra’s farming hubs in Ying and Yutian for $513 million.
Further, Fonterra will sell its 85 per cent interest in its Hangu farm to Beijing Sanyuan Venture Capital Co. for $42 million.
Beijing Sanyuan currently has a 15 per cent minority shareholding in the Hangu farm.
“For the last 18 months, we have been reviewing every part of the business to ensure our assets and investments meet the needs of the co-op today. Selling the farms is in line with our decision to focus on our New Zealand farmers’ milk,” CEO Miles Hurrell said.
“China remains one of Fonterra’s most important strategic markets, receiving around a quarter of our production. Selling the farms will allow us to focus even more on strengthening our Foodservice, Consumer Brands and Ingredients business in China,” Miles said.
“We will do this by bringing the goodness of New Zealand milk to Chinese customers in innovative ways and continuing to partner with local Chinese companies to do so,” he added.
The sales, which are subject to regulatory approvals in China, are expected to be completed within this financial year and Fonterra will use the money to reduce debt.
Fonterra has ended the day a slight 1.08 per cent in the green with shares trading for $3.76 each in a $392.8 million market cap.
