Canterbury dairy processor Synlait has announced an $82 million partnership deal with a Chinese company.
Bright Dairy & Food Co will invest in Synlait Milk to drive its value-added export strategy.
The agreement, which remains subject to regulatory and shareholder approval, means Synlait Ltd and Bright Dairy will become joint owners of Synlait Milk, with the Chinese company holding a controlling 51% interest.
In a statement, Synlait said a key element of the value-added export stratety would eb the sourcing of high quality infant and whole milk powders for Chinese consumers, facilitated by Bright Dairy’s presence in the sector.
Bright Dairy is listed on the Shanghai stock exchange with a market capitalisation of about $1.7 billion and revenues of about $1.63 billion for the 2009 calendar year.
Earlier this month Bright Dairy failed in a bid to buy CSR Ltd, the world's leading sugar producer,being outdone by Wilmar International, the world's largest palm oil trader.
Synlait Milk’s chief executive John Penno said today that work has already begun on building a second large scale milk powder processing production plant capable of producing high specification formulated milk powders alongside its existing facility at Dunsandel, near Christchurch.
The plant would be commissioned in time for the 2011/2012 season, more than doubling the capacity of the site.
This comes after a failed attempt last year to attract investors as part of a $150 million share float.