Fonterra, Nestle scale back JV

Fonterra, Nestle scale back JV

Nestle and Fonterra have announced the realignment of their joint venture Dairy Partners America, which will see the joint business pull back from various Latin American markets and continue to operate in Brazil alone.

DPA was created in 2003 as a 50:50 joint venture manufacturing milk powder and manufacturing and commercialising chilled and liquid dairy products throughout Latin America.

In a statement issued by Nestle today (27 May) the firm said: "The time is right to realign the partnership to better reflect the respective strategies of Nestle and Fonterra in the region."

As a result, the DPA milk powder factories in Brazil, Argentina, Ecuador and Colombia will once again be controlled by Nestle, as will the liquid business in Ecuador.

The chilled and liquid dairy business in Venezuela will go back to Fonterra, who will operate it with a local partner.

Only in Brazil will the DPA joint venture continue for the commercialisation of chilled dairy, with Fonterra taking a 51% stake and Nestle 49%.

A spokesperson for Nestle told just-food the deal is expected to close before the end of the year and that the decision to part ways had "nothing to do" with the botulism scare Fonterra was tied up in last year.

"Nestle's partnership with Fonterra has worked well in the past and it meets both companies' strategic goals to continue in Brazil, one of the fastest growing economies in Latin America. Nestle will have strong rights with the JV selling Nestle brands, making it a strong Nutrition, Health and Wellness platform," the spokesperson added.