Fonterra has reached an agreement with Chinese infant formula firm Beingmate to unwind their joint venture in Darnum, Australia.
A spokesperson from the New Zealand dairy company said both firms have reached a provisional agreement with regards to the joint venture.
Fonterra acquired an 18% stake in Beingmate in 2014 and as part of the investment, the companies bought the Darnum plant, located in the state of Victoria.
A Fonterra spokesperson said: “At our 2018 annual results presentation, we signalled that we’re undertaking a strategic review of our investments to ensure they’re fit for purpose.
“We’ve been open about the fact we’re looking at all aspects of our investment in Beingmate as part of that broader strategic review. This includes our Darnum joint venture.”
Fonterra is expected to release further details of its plans for Darnum in its first-quarter results, which will be published later this week.
In its most recent financial results, Fonterra recorded its first annual loss since its inception in 2001. The poor figures were, in part, affected by a NZD 439 million ($287.7 million) writedown on its investment in Beingmate.
In July, Beingmate appointed Bao Xiufei as its new general manager in a move to re-focus its business for growth.
Fonterra said the appointment signals an important step in the transformation of Beingmate.
© FoodBev Media Ltd 2019