News: South America

FONTERRA TAKE BIGGER STAKE IN BRAZIL

Fonterra and Nestlé have realigned their 50-50 joint venture in Dairy Partners Americas (DPA), the biggest dairy company in South America, in a move that will yield the NZ dairy co-op close to $100m. Fonterra will take a 51% controlling stake in DPA Brazil and together with a partner will buy out Nestlé’s share of DPA Venezuela. Fonterra will at the same time sell their share in DPA Ecuador and their stake in DPA’s milk powder manufacturing business. On balance, Fonterra expect to realise about $96m in the next financial year, providing the changes are signed off by regulators. Fonterra’s Latin American operation earns $3.5bn in revenue a year from consumer dairy, food service and dairy ingredients. Chief executive Theo Spierings said the JV had performed well for 10yrs, but it was time to adjust it to better reflect each company’s strategy in the region.