The New Zealand-based company announced Monday that it is selling its Chinese farms to local rivals for 555 million New Zealand dollars ($369 million). CEO Miles Hurrell said the deals will allow Fonterra to focus on areas in which it has a competitive advantage.
“Selling the farms is in line with our decision to focus on our New Zealand farmers’ milk,” he said in a statement, adding that the proceeds would be used to pay down debt.
But the business has been costly to operate. Last year, Fonterra wrote down the value of the farms by $135 million.
The sale underscores how difficult it has been for Fonterra to find success overseas. The company lost more than 600 million New Zealand dollars ($400 million) last year, largely because of trouble with its business in China, Brazil and Venezuela.
The Chinese farms aren’t the only investment in the country that has soured. Last year, Fonterra announced that it would reduce its stake in Chinese infant milk maker Beingmate, a partnership it called “disappointing.”
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