Is the Chinese ranch in Fonterras hands not fragrant?

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


In addition, Fonterra agreed to sell 85% of its equity in Beijing Hangu ranch to Beijing Sanyuan Venture Capital Co., Ltd. (hereinafter referred to as Sanyuan) for NZ $42 million (about RMB 190 million). Sanyuan holds a 15% minority stake in the farm and has exercised a preemptive right to buy 85% of Fonterras shares.

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?

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.

Fonterra announced in September last year that its new strategy would focus more on more competitive business areas such as catering services, consumer brands and raw material supply.

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

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.