Is the Chinese ranch in Fonterras hands not fragrant?

category:Finance
 Is the Chinese ranch in Fonterras hands not fragrant?


The deal, which also requires antitrust licensing from relevant Chinese authorities and approval from other regulatory authorities, is expected to be completed within this fiscal year.

Is the Chinese ranch in Fonterras hands not fragrant?

According to the information provided by Fonterra, it established its first experimental pasture in China in 2007. At present, it has three dairy breeding bases in China, which are located in Yutian County of Hebei Province, Yingxian County of Shanxi Province, and the ranch jointly built with Abbott in Qihe County, Shandong Province. At present, there are more than 30000 lactating cows in China, producing more than 330 million liters of milk each year. According to industry data, Fonterra Chinas dairy farms produce 1% of the total milk source of Chinas dairy industry every year.

Miles Hurrell, Fonterras chief executive officer, said the sale of China owned farms was in line with its decision to focus on New Zealand milk sources. China remains one of Fonterras most important strategic markets, and more than a quarter of our products are sold to greater China. The sale of our own ranch business will help us better focus on developing our catering service business in Greater China, strategic customer service in China, consumer brands and raw materials business.

The benefits of implementing the strategy are also reflected in performance. According to the financial report data previously released by Fonterra, the companys revenue in fiscal year 2020 (i.e. from August 1, 2019 to July 31, 2020) was $21 billion (about RMB 96.289 billion), an increase of $1.1 billion; the adjusted after tax profit was $382 million, an increase of $118 million. Among them, the performance of the Greater China market was strong, which rose against the trend against the background of the epidemic. In addition to selling farms, Fonterra is also shrinking its previous investment in the milk powder industry. In March 2015, Fonterra made an offer to acquire 18.8% of the equity of Bain Mae at the price of 18 yuan per share, becoming the second largest shareholder of Bain MEII, with the acquisition cost of about 3.464 billion yuan. However, with the huge losses of Bain mein in 2016 and 2017, the contradiction between Fonterra and Bain mein was also made public in 2018. Since August 2019, Fonterra has reduced the holding of Bain mein for many times. As of September 28, 2020, the shareholding ratio of Fonterra dairy (Hong Kong) Co., Ltd. in beingmei decreased to 7.82%, and it is still the second largest shareholder of Bain mein. Source: interface news editor: Wang Wenhua_ NF5982

In addition to selling farms, Fonterra is also shrinking its previous investment in the milk powder industry.

In March 2015, Fonterra made an offer to acquire 18.8% of the equity of Bain Mae at the price of 18 yuan per share, becoming the second largest shareholder of Bain MEII, with the acquisition cost of about 3.464 billion yuan. However, with the huge losses of Bain mein in 2016 and 2017, the contradiction between Fonterra and Bain mein was also made public in 2018. Since August 2019, Fonterra has reduced the holding of Bain mein for many times. As of September 28, 2020, the shareholding ratio of Fonterra dairy (Hong Kong) Co., Ltd. in beingmei decreased to 7.82%, and it is still the second largest shareholder of Bain mein.