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Fonterra takes over Saudi dairy plant

Fonterra says it has finalised the purchase of the remaining 51 percent stake in Saudi New Zealand Dairy Products with former joint-venture partner Saudi Dairy and Foodstuff Company (Sadafco).Fonterra said in a statement that it now wholly owns the dair

NZPA
Wed, 31 Mar 2010

Fonterra says it has finalised the purchase of the remaining 51 percent stake in Saudi New Zealand Dairy Products with former joint-venture partner Saudi Dairy and Foodstuff Company (Sadafco).

Fonterra said in a statement that it now wholly owns the dairy factory in Dammam, Saudi Arabia.

The managing director of the company's Middle East, Africa (MEA) and Commonwealth of Independent States (CIS) operations, Amr Farghal, said the deal worth around $45 million was a major step forward for its strategy in Saudi Arabia and Gulf cooperation council (GCC) which also includes Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates.

"We have great confidence in the stability and growth of the GCC economies, and see tremendous opportunity for our business in this region," he said.

"With rising demand for high quality dairy products, this acquisition secures our manufacturing capacity requirements for the future and helps us bring more world class ingredients and innovative new products to the Middle East."

The Gulf region already contributes significantly to Fonterra's offshore revenues: in the financial year to July, sales revenues in the Middle East, Asia and Africa were up by 22 percent to $US1.7billion in total group sales of $US12.6b.

Commentators in the region have said expected strengthening in dairy consumption and further industry segmentation should help Fonterra continue to grow its Gulf business.

NZPA
Wed, 31 Mar 2010
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Fonterra takes over Saudi dairy plant
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