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Fonterra in African venture

May 16, 2005 2:40 PM

Fonterra says it has finalised an agreement with South Africa's Clover Industries to form a joint venture on the African continent.

The venture will manufacture and distribute dairy products in the sub-Saharan continent, merging the operations of the two companies.

The agreement, approved by South Africa's Competition Tribunal, allows the formation of a joint venture company, Clover Fonterra Ingredients (CFI).

CFI will handle the marketing of bulk dairy ingredients, carry out contract ingredient manufacturing, and supply food service products to nominated quick-service restaurants throughout the sub-Saharan region.

The new company will be headed by Clover executive Pieter Uys, who will report to a board of directors, made up of Fonterra and Clover executives.

The new company will employ all existing Clover and Fonterra staff directly involved in the businesses being joined to create CFI, Fonterra says

Fonterra (South Africa) general manager Malcolm Tweed says CFI will deliver customers a broader product range with greater security of supply and an enhanced product development capability.

The integration of Fonterra and Clover's manufacturing and supply chain processes will play a big part in achieving this, Tweed says.

Clover is South Africa's largest dairy company and one of the leading manufacturers and marketers of food products in Southern Africa.

Clover processes some 30% of South Africa's milk, predominantly for the retail market.

The company also trades in commodities such as bulk-packed milk powder and butter.

The Clover Group is owned by about 800 supplier shareholders and employs more than 6,000 staff.