WELLINGTON - Fonterra Co-operative Group Ltd said Wednesday it will sell its Australian yoghurt and dairy dessert business to the Australian unit of Parmalat SpA as part of its plans to shore up its Australian operations.
The deal, which is conditional on regulatory and other approvals, is expected to be completed in the first half of 2016, Fonterra said in a release. Fonterra, the world's largest dairy exporter, said the sale price was confidential.
Fonterra has been struggling in Australia, where it faces tough competition and a margin squeeze. Its turnaround strategy to restore sustained profitability includes divesting some businesses, expanding others and launching new ones.
Other measures include plans to rebuild its factory in Stanhope, in northern Victoria, as a state-of-the-art primary cheese manufacturing plant, with 50 percent extra capacity. It has also divested its nine percent stake in Bega Cheese Ltd and launched its largest global brand, Anchor, in Australia.
"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," Fonterra Chief Executive Theo Spierings said in a statement.
