With the deal, Fonterra now owns 99.9% stake in Prolesur and will simplify its operations with Soprole
New Zealand-based co-operative dairy group Fonterra has acquired a stake of 13.6% in Prolesur, a Chile-based milk processor, from Fundación Isabel Aninat for NZD29.3m ($19.3m).
With the deal, Fonterra’s stake in Prolesur has gone up from 86.2% to 99.9%. Prolesur is a southern Chile-based milk processor that sells most of its production to Soprole, a consumer branded dairy company in the country. Fonterra also owns 99.9% stake in Soprole.
Fonterra CEO AMENA Kelvin Wickham stated that the deal will allow the company to simplify the interface between Prolesur and Soprole and will take steps for better integration of the two businesses.
Wickham said: “Prolesur and Soprole are both strong businesses but their recent performance has been impacted by challenging market conditions. Having the two more closely integrated will generate operating efficiencies across the supply chain from milk collection, to processing and administration.
“It also allows us greater flexibility as we focus on realising the best value for the Co-op from our businesses in Chile in line with our new strategy.”
Fonterra also aims to acquire the remaining 0.1% stake in Prolesur
The remaining 0.1% stake in Prolesur will be held by minority shareholders, for which the New Zealand dairy company will offer the same price per share that was offered to Fundación Isabel Aninat to acquire the stake.
In September, Fonterra announced its plans to consolidate two of its cheese-making facilities, one in Te Roto and the other in Bridge Street, Eltham.
The cooperative had then announced that the consolidation will result in closure of the Te Roto factory and the cheese-making operations would move to Eltham.
As a phased transition, the movement of the operations is expected to be completed by the end of next April. At present, there are 65 employees working at the Te Roto factory.
Earlier this year, Fonterra had signed up a supply agreement with The a2 Milk company to supply milk for the 2019/2020 season.
The co-operative stated that initially it will pool milk, based in Waikato and will support the production of ingredients. It also estimated that nearly 100 farms will be needed for next season.