Fonterra Sells Joint Venture Shares To Maeil Dairy

Wednesday 31 July 2002 For Immediate Release

Fonterra Sells Joint Venture Shares To Maeil Dairy

Following negotiations, Fonterra Co-operative Group has agreed to sell their 50% shareholding in the Korean-based Maeil New Zealand Cheese Company to Maeil Dairy Industry Company Limited.

Maeil New Zealand Cheese Company is internationally recognised as a manufacturer of high quality cheese products. It currently exports to McDonalds Japan and further exports are expected from next month. Consumer products include its flagship product, a 'straight to the bone' high calcium cheese.

The objectives of the joint venture, setup between Maeil Dairy and the former New Zealand Dairy Board nearly thirteen years ago, was to establish a strong position in the Korean cheese market. This has been achieved as Korea is now the second largest cheese market in Asia - and Maeil New Zealand Cheese Company is the market leader.

Having enjoyed a very successful partnership Fonterra has agreed to sell its share to Maeil so that each partner can now pursue other business opportunities.

Fonterra looks forward to continuing its close relationship with Maeil Dairy and to co-operating further with Maeil Dairy in the Korean market, now and in the future.

The terms of the sale and purchase of shares were agreed last Friday and the transaction goes completion date will be on 27 August 2002. The 650,000 shares, with a par value of 10,000 won for 50% of the total shares, were issued at USD$6.5 million.

ENDS

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