Fonterra has struck a deal with Arab Dairy Products Co., which will see the Egyptian dairy company manage the processing and distribution of the New Zealand firm’s Anchor brand throughout Egypt.

The partnership includes the manufacture, packing and marketing of Anchor triangle processed cheese and jar cheese, as well as the future distribution of Anchor milk powder products, the company said.

Arab Dairy is currently responsible for co-packing Fonterra’s processed cheese portions which are sold in the GCC and Iraq. The new agreement will extend this partnership to include the manufacturing and packing of other Anchor cheese products through a brand licensing arrangement.

Amr Farghal, Fonterra GM for the Middle East, said the deal represents a “great”  growth opportunity for the New Zealand company.

“Egypt has a population of more than 80m and has a processed cheese retail market that alone is valued at over NZD350m (US$201.5m),” Farghal said. “With Arab Dairy’s infrastructure, we are well positioned to reach this market through our Anchor brand, which has been very successful in other parts of this region.”

Arab Dairy has committed to invest a further NZ$25m to expand its capacity.

Farghal said that Fonterra was “excited” about the opportunities the partnership might have beyond Egypt.

“Egypt has signed free-trade agreements with a number of countries in the Middle East and Africa, so our partnership with Arab Dairy could open up a gateway to a further 1bn consumers.”