Fonterra Initiative In India

Friday 26 October 2001

NEW ZEALAND MILK, the consumer products division of Fonterra Co-operative Group Ltd, is to enter the Indian dairy market by establishing a joint venture with Britannia Industries Ltd, which owns one of India’s strongest food brands. The deal is subject to regulatory approval.

Britannia, based in Bangalore and with annual turnover of NZ$600 million, is principally in the bakery business and has a strong national distribution network. In recent years it has expanded into the dairy sector as part of its growth strategy and it has identified NEW ZEALAND MILK as having the expertise and international marketing experience needed to expand its dairy business rapidly.

Fonterra CEO Craig Norgate said the alliance would provide Fonterra with a strategic point of entry into a market of huge potential within the world’s fourth largest economy.

“India’s total dairy market, at NZ$50 billion, is one of the world’s biggest. Steady growth and liberalisation of India’s economy has opened up attractive opportunities for investment in the country’s dairy industry,” he said.

NEW ZEALAND MILK Managing Director David Pilkington said domestic operators, via an informal market, supply the largest sector of the Indian market.

“The NZ$8.5 billion ‘formal’ market, which is growing at nine percent annually, is the target for Britannia and NEW ZEALAND MILK,” Mr Pilkington said.

Britannia currently markets processed cheese, butter, dairy whiteners and ghee and has recently expanded into liquid milks, which it is now selling in Delhi and Calcutta. Mr Pilkington said the joint venture would further expand this product range, having identified strong growth potential in the milks and foodservice categories.

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