[12 February/NZ Herald]

Fonterra has announced that it has taken back full ownership of the Darnum manufacturing plant in Australia, unwinding its processing joint venture with Chinese partner, Beingmate. The exact terms of the separation agreement remain confidential. A Fonterra spokeswoman said the deal had been structured to ensure no cash was paid by the co-operative to Beingmate, adding that the company would remain a cornerstone customer of the Darnum site. They explained that the agreement includes the parties entering into a multi-year supply contract for ingredient supply to Beingmate. With base milk powder sales volumes not meeting the expectations (750,000 tonnes per year, or 51 per cent of the total annual production capacity of Darnum), Beingmate had to pay a fixed compensation fee of about A$200m. Beingmate decided to withdraw from the agreement and Fonterra was happy to oblige. Fonterra said taking full control of Darnum will give it more options, with the spokesperson noting that the co-operative will be able to look for new partners, improve efficiencies and produce a product mix that creates the greatest value for our farmer-owners and unit holders.