Dairy

Partnership good for business

By Country News

Fonterra and The a2 Milk Company (a2MC) are set to join forces, announcing plans to link Fonterra’s global milk pool and supply chain with a2MC’s brand strength to create more business opportunities.

As part of the agreement, Fonterra will now contact farmers about sourcing an A2 milk pool for products in Australia, with a similar milk pool to be developed in New Zealand with a view towards exporting to South-East Asia and the Middle East.

Announcing the deal on February 21, Fonterra chief executive officer Theo Spierings and a2MC managing director and chief executive officer Geoffrey Babidge said the partnership was designed to generate returns for both companies by growing demand in local and international markets of a2 products.

‘‘The partnership is intended to fast-track market growth and this creates opportunity for our farmers to create additional value from their milk,’’ Mr Spierings said.

‘‘We continue to see a strong future for dairy-based on our existing range of products, including recent additions such as organic, low-lactose and high protein milk choices that consumers seek out for a premium.

‘‘Consumers like to have choices and the growth of a2MC branded nutritional powders and fresh milk sales in Australia, for example, shows the potential. This partnership is all about finding ways to continue to delight our consumers and generate more value for our farmers.’’

Fonterra will also exclusively supply nutritional milk powder products in bulk and consumer packaged size for sale in a2MC’s priority markets and explore potential for a2MC branded cheese and butter in Australia, New Zealand and China.

A jointly owned packaging facility will also be explored as an extension of the arrangements to cater for growth.