Fonterra invests in Chinese baby formula company

Fonterra will invest $550 million in a leading Chinese infant formula company, Beingmate, in a deal that promises to provide the NZ company with new inroads into the lucrative dairy market.

The partnership will see the NZ dairy company exchange a 51 per cent majority share of its milk powder factory at Gippsland in Victoria for a 20 per cent share of the Chinese company.

Fonterra Australia MD, Judith Swales, is predicting that the value of the infant formula market in China will nearly double in the next three years to $33 billion by 2017.

She also described the deal as a “game changer for the dairy industry in Australia” in an ABC Rural report.

The deal is contingent on approval from the Australian Foreign Investment Review Board.