Friday, March 29, 2024

Win-win in South America

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The re-alignment of Fonterra’s agreement with Nestlé in South America may open the way for the co-op’s Latin American star performer Soprole to export its products to the growing Brazilian market.
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Fonterra has increased its stake in its Dairy Partners America (DPA) arrangement with Nestlé to take a 51% controlling stake in DPA Brazil.

Fonterra chairman John Wilson wouldn’t confirm Soprole, which produces consumer products, would venture out of its Chile base although he did say the move, announced in late May, allowed Fonterra more flexibility with Soprole and what it could do.

The realignment was a win-win with both partners better able to pursue their strategy. Under the realignment Fonterra, together with a local partner, will acquire Nestlé’s share of DPA Venezuela, Fonterra will sell its share in DPA’s milk powder manufacturing business to Nestlé and Nestlé will buy Fonterra’s share in DPA Ecuador.

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