New Zealand dairy giant Fonterra is to sell its livestock division to locally-based Carrfields Livestock, it has announced.
The cooperative – the world’s largest dairy exporter – said the decision to sell “was made in the context of a larger review”.
Richard Allen, Farm Source stores director at Fonterra, said: “In the context of the review of the co-op’s assets and investments, we have made the decision to sell the livestock division to Carrfields Livestock. This will better serve the livestock team and the farms they service.
“While Farm Source’s livestock division has contributed positive returns since inception, we believe the investment required to maintain and grow this division can be more effectively targeted towards improving core areas of the Farm Source business.”
Carrfields Livestock is a livestock agency provider headquartered in Ashburton. New Zealand.
Fonterra said its Farm Source arm – launched to provide support to farmers – is working with Carrfields to develop a range of “partnership offerings to ensure a positive connection and competitive offer remains for Fonterra farmers”.
Craig Carr, Carrfields Group’s managing director, said the acquisition is a strategic opportunity for the business to fill gaps in its current national network.
“This acquisition will take the Carrfields Livestock team to over 150 livestock agents spread right across the country. This strategic partnership will offer Farm Source clients and Fonterra farmer owners access to a nationwide agent and sale yard network provided by a New Zealand family-owned business,” he said
Carrfields Livestock’s ownership of Fonterra’s assets will begin on 1 March. Fonterra said for a “small number of employees who will not have the option to transition to Carrfields Livestock, Farm Source will support them in identifying new opportunities within the co-op.”
Financial details of the deal were not disclosed.
Fonterra initiated a root-and-branch review of its business after posting a NZD196m (US$128.5m) loss for the 2018 financial year – its first annual loss since its inception in 2001.