Fonterra has announced it will sell its Australian yoghurt and dairy dessert business to Parmalat Australia.
The sale, which is conditional on regulatory and other approvals, is expected to be completed in the first half the of the 2016 calendar year.
The divestment of its Australian yoghurt and dairy desserts business, which includes manufacturing sites at Tamar Valley and Echuca as well as its Australian yoghurt and dairy dessert brands, is part of a comprehensive plan to return the Australian business to strong and sustainable profitability.
Chief Executive Theo Spierings said these changes were the result of driving a clear strategic plan to transform the Australian business to deliver stronger returns to farmer shareholders and unit holders.
“We are focusing on areas where we can win in a highly competitive market, and that means optimising our product mix and streamlining operations to match, and investing in higher value add products that will deliver the best returns for our farmer shareholders and unit holders.”
“As a key part of our multi-hub strategy, we are matching these strengths with the opportunities across our 100 markets,” said Spierings.
Fonterra Managing Director Oceania Judith Swales said Fonterra is “totally committed to the Australian dairy industry”
“We will continue investing in programs and innovation that supports our market-leading brands in key retail categories, including Western Star butter and Perfect Italiano, Mainland and Bega cheeses, Anchor cream, and fresh milk.”
“Divesting the yoghurt and dairy desserts business will allow us to focus on what we do best, so we can continue delivering a competitive milk price to our suppliers, benefits to our customers, innovative dairy foods to our consumers, and improved returns to our farmer shareholders and unit holders,” concluded Ms Swales.
According to a Fonterra spokesperson, the decision to sell our Australian yoghurt and dairy dessert business is part of a comprehensive plan to return Fonterra’s Australian business to strong and sustainable profitability.
"The sale will allow us to focus on what we do best, and lock in our competitive position in the Australian market – we will focus on investing in the growth of our other market-leading brands, including Western Star, Perfect Italiano, Bega, and Mainland, and our recently launched Anchor brand."
"It’s no secret our yoghurt and dairy desserts business has been challenged in recent years," the spokesperson said."
"Our people have worked hard to improve the returns from our yoghurt and dairy dessert business, and their efforts have resulted in good performance from Tamar Valley and agreements achieved with key customers to drive volume and category growth. It is a sign of respect for their hard work that all employees at our Echuca and Tamar Valley plants have received offers of employment from Parmalat."
"This sale will have no impact to our Anchor or Riverina Fresh yoghurt, which we produce in foodservice format at our Wagga Wagga facility, nor will it impact our New Zealand yoghurt business."