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Fonterra goes to India

Fonterra has announced a joint venture partnership with one of India’s largest consumer companies, Future Consumer Ltd, to produce a range of consumer and foodservice dairy products that will help meet the growing demand for high-quality dairy nutrition in India.

“It will allow us to prepare the groundwork and make the most of our expertise as we enter the world’s largest and fastest growing dairy industry. Consumer demand for dairy in India over the next seven years is set to increase by 82 billion litres – seven times the forecasted growth for China”, says Lukas Paravicini, Fonterra’s Chief Operating Officer Global Consumer and Foodservice.

Future Consumer Ltd is part of the Future Group which is leading the way in India by developing a new retail experience for consumers, with plans to launch 1,100 stores this year. The stores will be within close proximity of target consumers, and feature a complete digital experience both in-store and through a virtual market place.

Cheese added to the Anchor brand

For years milk, butter and yoghurt have all been part of Fonterra’s Anchor range and now cheese is coming into the fold.

As well as the traditional Tasty, Colby and Edam, there are two new additions – Protein+ and Zero Lacto.

Zero Lacto cheese has been introduced as an additional option for Kiwis with lactose intolerance. While most hard cheese is naturally low in lactose this is batch tested to ensure there is no lactose, providing a guaranteed lactose free cheese option.

Protein+ has 26 per cent more protein than Anchor Tasty and is an easy way to increase protein in the diets.

Fonterra and a2 Milk join forces

Fonterra Co-operative Group Limited (Fonterra) and The a2 Milk Company (a2MC) have entered into a comprehensive strategic relationship that links Fonterra’s global milk pool and supply chain, manufacturing capability and in-market sales and distribution capacity with a2MC’s brand strength and capabilities.

The partnership encompasses:

  • New Zealand and Australian milk pools to support the strategic partnership, and in the first instance the Nutritional Products Manufacturing and Supply Agreement. Fonterra will now begin discussions with its farmers on the best way to source this A2 milk for a2MC products, and share the value it will create for farmers. It is intended that these milk pools will significantly expand over time to support new a2MC products and its new priority markets across South East Asia and the Middle East.
  • Nutritional Products Manufacturing and Supply Agreement (NPMSA) whereby Fonterra will exclusively supply nutritional milk powder products in both bulk and consumer packaged formats intended for sale in a2MC’s new priority markets across South East Asia and the Middle East. These products will be produced at Fonterra’s facilities in New Zealand as well as Fonterra’s nutritionals facility, Darnum in Victoria, Australia. 
  • Distribution and sales arrangements, in respect of a2MC branded products whereby the companies will seek to establish distribution and sales arrangements to assist a2MC’s entry into its new priority markets across South East Asia and the Middle East. 
  • Exclusive period to explore a2MC branded butter and cheese, and China sourced liquid milk for sale in Australia, New Zealand and China. These relate to other dairy products not presently marketed by a2MC and would be complementary to Fonterra’s existing portfolio of dairy products. 
  • A jointly owned packaging facility will also be explored as an extension of the arrangements under the NPMSA and to cater for growth.
  • A New Zealand Fresh Milk Licence which will see Fonterra hold an exclusive licensing arrangement for the production, distribution, sale and marketing of a2 MilkTM  fresh milk for sale in New Zealand. Fonterra will leverage its substantial fresh milk capabilities to establish distribution across the country.

Fonterra builds two new cream cheese plants

Fonterra announces plans for two new cream cheese plants at its Darfield site in Canterbury.

With cream cheese undergoing a steady surge in popularity in Asia, the $150 million two-stage project will see the first plant completed in 2018 with a second to follow in either 2019 or 2020.

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GEA: “the most efficient milk powder plant in the world”

GEA installs a high performance spray dryer as the centerpiece of the new milk powder plant for Fonterra in Lichfield, New Zealand.  With the capacity of 30 tons of milk powder per hour, it can process nearly 4.4 million liters of milk per day. This volume corresponds to 165 truckloads. On September 5, 2016, Fonterra started the production process, which is now being gradually expanded to round-the-clock operation.

GEA was responsible for the complete turnkey milk powder plant and provided all of the processing technology – from acceptance of the tanker to evaporation, drying and powder handling to packaging.

Fonterra profit up 65 per cent

Fonterra Co-operative Group has announced a 65 per cent increase in net profit after tax to NZ$834 million for the financial year ended 31 July 2016 – reflecting a stronger business despite ongoing challenges in global dairy markets.

“We’ve seen the real strength of our ingredients business this year. The money our farmers have invested in stainless steel is giving us more choice, and we have matched production to the highest value customer demand. In a difficult market, we increased ingredients normalised EBIT this year by 24 per cent to $1,204 million, Chief Executive Theo Spierings says.

“In consumer and foodservice, we converted an additional 380 million litres of liquid milk equivalents (LME) into higher returning products, bringing our total volumes in this business up from 4.5 billion LME to 4.9 billion. Increasing our consumer and foodservice volumes, and especially our foodservice growth, meant we increased our normalised EBIT in this business by 42 per cent to NZ$580 million.”

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Microfiltered milk from Fonterra on the Australian market

That’s the new frontier in the competitive battle for Australia’s multi-billion dollar milk market with a new $31 million plant opened in Cobden in Victoria’s west to process microfiltered milk sourced from local farms. 

Microfiltered milk is pasteurised like other milk, but also goes through a microfiltration process that removes more than 99 per cent of the non-harmful bacteria that causes milk to sour.  The new microfiltration Anchor brand milk will have a shelf life around a third longer than normal milk, a big edge for the brand with use-by date a key decision factor for consumers. 

Regular milk lasts about 15 days on the fridge shelf. Microfiltration extends this to 21 days. 

While microfiltered milk is already available in Canada and the United Kingdom, the new Anchor milk is the first microfiltered milk in Australia and will initially be sold in Victoria at Woolworths.  

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Fonterra ‘fingerprinting’ milk

Fonterra has received a New Zealand Innovation Award for their Milk Fingerprinting test. The new test delivers the detailed composition in milk by light analysis and sophisticated computing.

Jeremy Hill, Fonterra’s chief science and technology officer said, in a statement on the company’s website, that the new test reduces the time required for processing results, cutting the costs by 99%.

Instead of taking days or weeks the test can be carried out on hundreds of samples in seconds. The instant results ensure a quality, safe supply of dairy nutrition.

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Fonterra sells stake in DairiConcepts

Fonterra will sell its 50% stake in U.S. joint venture DairiConcepts for around 196 million New Zealand dollars (US$126 million), but said the country remains a key part of its global strategy.

Fonterra’s stake sale – due to take place at the end of this year – means Dairy Farmers of America will fully own the DairiConcepts venture, which was established 15 years ago.

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