The company has entered into an agreement with Fonterra Brands (Mauritius Holding) for acquiring the latter’s 49% equity and preference share holding in BNZF, the joint venture firm engaged in the dairy business, Britannia said in a filing to the Bombay Stock Exchange.
Britannia, however, did not disclose the financial details of the deal. The acquisition is subject to approval from the Reserve Bank of India, the filing added.
BNZF is a joint venture company founded in 2002 by Britannia Industries Limited (BIL) and Fonterra Co-operative Group of New Zealand. The company focuses on the dairy business, with cheese being its flagship product. All products are marketed under the ‘Britannia MilkMan’ brand.
Vinita Bali, Britannia CEO, said that bakery and diary operations are to be key growth drivers for Britannia: “We may enter into new segments apart from bakery and dairy in the next few months,” she said. “The company is confident of seeing aggressive growth rate in business and are still looking at double-digit growth.”
However, she was quick to add that the slowdown may affect growth by a couple of percentage points.
Fonterra MD Asia Middle East, Mark Wilson, said: “We’re casting a critical eye over our investments on an ongoing basis to ensure they reflect our key strategic priorities. While we’re seeing a lot of growth in India, the local milk supply is fragmented and requires significant development and investment in order to deliver an efficient supply chain for high-quality fresh milk.
“Investing in India’s consumer dairy market isn’t a core priority for Fonterra at this time.”
Wilson added that Fonterra would continue to supply dairy ingredients to key customers in the Indian market and would keep an active interest in any future opportunities.
Source: The Wall Street Journal, MoneyControl, Fonterra
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