Fonterra is to pay NZ$45m (US$32.5m) to take full control of a Saudi dairy venture, a business that the New Zealand dairy giant believes will help it expand across the Middle East and Africa.
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The company said today (15 December) it had reached a “final agreement” to buy the remaining 51% stake in Saudi New Zealand Milk Products, a joint venture with Saudi firm Sadafco.
The move, first announced by just-food last week, will see Fonterra take control of a manufacturing facility and capacity to serve markets in the Middle East, Africa and the CIS region.
Amr Farghal, managing director of Fonterra’s business across the region, said the markets were “strategically important” for the world’s largest dairy exporter.
“We have great confidence in the stability and the positive outlook of the GCC economies. The Middle East, Africa and CIS accounts for around 20% of sales in the Asia Middle East consumer division, and is one of our key focuses for expansion,” Farghal (pictured) said.
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By GlobalData“Saudi Arabia is the cornerstone of our business in the GCC, and will continue grow with more investment, the introduction of value added products and strengthening Fonterra’s presence on the ground.”
The deal remains subject to local regulatory approval in Saudi Arabia.
