Saturday, 26 December 2009
Kiwi dairy company doubles investment in Middle East
Source: Arabian Business
Fonterra Cooperative Group Ltd, the world’s biggest exporter of dairy products, said its investment in the Middle East and Africa doubled since 2006 as it seeks to tap demand for powdered milk and increase exports to the region.
Fonterra wants to boost production at a newly acquired plant from a Saudi partner as part of the Auckland, New Zealand based company’s five year expansion plan in the Middle East, said Amr Farghal, managing director of Fonterra’s Middle East, Africa and Commonwealth of Independent States businesses.
Speaking in an interview, Farghal said: “The Middle East, Africa, and CIS region accounts for around 20 percent of sales in the Asia Middle East consumer division, and it is one of our key focuses for expansion."
Fonterra reached a final agreement last week to take full ownership of Saudi New Zealand Dairy Products Co after buying a 51 percent stake from partner Saudi Dairy & Foodstuff Co for $33 million (NZ$45 million).
More than half of the production at Saudi New Zealand’s plant, which started in 1996 and processes about 30,000 metric tons of New Zealand milk a year, is exported to the Middle East including Gulf countries, Africa, and former Soviet Union countries, Farghal said.
Demand for New Zealand products will increase if a free trade agreement is reached between the country and Gulf states, Farghal said. He expects an agreement to be signed in April.
Saudi Arabia’s population is growing about 2 percent a year, increasing demand for milk powders and cheese sold by Fonterra and rivals Nestle SA, Kraft Foods Inc and Almarai Co, the kingdom’s biggest food processor.