Fonterra increases stake in Lithuanian dairy to drive Middle East export growth

By Lester Wan contact

- Last updated on GMT

Fonterra has increased its investment in Lithuania's Rokiskio to support its milk pool and grow export markets. ©Fonterra
Fonterra has increased its investment in Lithuania's Rokiskio to support its milk pool and grow export markets. ©Fonterra

Related tags: Milk

Fonterra has increased its investment in Lithuania's biggest dairy producer, AB Rokiskio Suris, to support its New Zealand milk pool and further grow its export markets such as the Middle East.

The €7.1 million investment in Rokiskio represents a 10% shareholding that secures a supply line of whey ingredients and opens up product options for the dairy giant across Europe and the Middle East.

It also creates the opportunity to tap into additional dairy products from the Baltic milk pool to serve the increasing demand from developing export markets.

"Our New Zealand farmers will always remain our primary source of milk but increasingly we are supporting our growth and their returns through strategic partnerships in Europe, Latin America, Australia and China,”​ said John Wilson, chairman of Fonterra.

“These partnerships enable us to produce products in demand closer to the market, while providing more opportunity for milk and milk products we make elsewhere,"​ he said.

Theo Spierings, CEO of Fonterra, added: “Our ability to access high-value whey protein ingredients is increasingly important as demand grows, especially in Eastern and Western European, Middle Eastern and North African markets. Rokiskio is also a highly-respected cheese producer and this also opens up further opportunities for us to satisfy customer demand in these markets.

“This is another step in our strategy to develop a sustainable European-sourcing network, providing a reliable and efficient chain of supply that will complement our New Zealand-sourced ingredients.”

Dalius Trumpa, chairman of Rokiskio, said the company's focus on product quality and safety and its environmental performance were key reasons for its strong relationship with Fonterra. Likewise, he had his eye on new export markets.

"Fonterra's investment in Rokiskio lifts our company to a new global level, opening up export opportunities which will generate more value from our local milk pool,"​ said Trumpa.

"By welcoming Fonterra as a shareholder, future growth can be accelerated by entering new markets and investing in new technologies,"​ he said.

Rokiskio has three factories in Lithuania and makes cheese, butter, whey protein and milk powders. It is one of the largest and best-known cheese manufacturers in Central and Eastern Europe, making more than 30,000 tonnes a year. The company exports to both Western and Eastern markets.

Fonterra is ranked by Rabobank as the world's sixth-largest dairy company by turnover in 2017. It has consumer dairy brands in Latin America, Africa-Asia, the Middle East, and Australia-New Zealand and has been constantly looking to grow export markets.

Spierings said the development built upon a long-term commercial partnership would benefit both companies. 

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