Fonterra is selling its Australian yoghurt and dairy dessert business to Parmalat Australia, in order to focus more on cheese, whey and nutritionals.
Fonterra's Australian brands include Tamar Valley, SKI and Calcium Yum, and Parmalat makes the Pauls and Vaalia yoghurt brands.
The NZ dairy giant said the divestment of the Australian yoghurt and dairy desserts business, which includes manufacturing sites at Tamar Valley and Echuca, is part of a plan to return the co-operative’s Australian business to "sustainable profitability".
The company's chief executive Theo Spierings said the changes would “deliver stronger returns to farmer shareholders and unit holders”.
“We're focusing on areas where we can win in a highly competitive market, and that means optimising our product mix and streamlining operations to match,” he said.
“Australia is our largest milk pool outside New Zealand, and is an integral part of our multi-hub strategy.
“Our Australian operations have particular ingredient strengths in cheese, whey and nutritionals, complemented by our strong consumer and foodservice businesses.”
Fonterra managing director Oceania Judith Swales said the company would continue investing in programs and innovation that supported its brands in key retail categories, including Western Star butter and Perfect Italiano, Mainland and Bega cheeses, Anchor cream, and fresh milk.
Fonterra acquired the struggling Tasmanian yoghurt processor Tamar Valley Dairy in 2013 after it went into voluntary administration.
The transaction, conditional on regulatory and other approvals, will be completed in the first half of the 2016 calendar year.
