New Zealand dairy heavyweight Fonterra said it remains committed to the Chinese market despite it agreeing the sale of its two joint venture farms in the country.

The farms in Shandong province will be sold to Singapore-based AustAsia Investment Holdings for US$115.5m with the transaction expected to complete by the end of this month.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Fonterra, which owns the farms with a joint venture partner, has a 51% stake in the business and will receive NZD88m (US$62.3m) in total asset sale proceeds.

The sell-off follow the cooperative’s announcement last October that it was selling its two wholly-owned China farming hubs in Shanxi and Hebei provinces to Inner Mongolia Youran Dairy in April for NZD552m.

Fonterra CEO Miles Hurrell said the latest disposals align to its strategy of prioritising New Zealand milk.

“The sale of the JV farms allows us to focus even more on our farmer owners’ milk and follows the sale of our two wholly-owned China farming hubs earlier this year,” he said.

But he added: “Greater China continues to be one of our most important strategic markets. We remain committed to our China business, bringing the goodness of New Zealand milk to Chinese customers in innovative ways and partnering with local Chinese companies to do so.

“We are well placed to continue to grow our business in Greater China,”

Fonterra, the world’s largest dairy exporter, has been criticised by its farmer-shareholders for its overseas ventures.

The dairy group revealed three months ago that it had further reduced its stake in China infant-formula joint venture Beingmate. At one stage it had a 19% share in the venture but in March this was reduced to 2.82% with Fonterra saying it will have exited the JV entirely by the the end of its financial year.

Fonterra described the results of the joint venture as “disappointing”.