Fonterra subsidiary Soprole and Nestle Chile today filed an application with the local competition authority in Chile, seeking approval for a 50:50 joint venture between parts of Soprole’s and Nestle Chile’s local dairy businesses.
If approved, DPA-Chile will have sales of approximately NZ$770 million per annum – with a large proportion of this coming from Soprole’s business.
DPA-Chile will focus on accelerating the growth of the liquid and chilled consumer dairy market, which has grown rapidly over the last three years.
It will bring together both parent companies’ strong local brands, manufacturing operations, sales, chilled distribution and marketing activities.
Fonterra’s dairy ingredients and export business in Chile – Prolesur – will remain outside DPA-Chile. Other parts of Nestlé’s dairy business in Chile; milk-powder, condensed milks and export products will also remain outside DPA-Chile.
Because Soprole is contributing a larger business, Fonterra will also receive approximately NZ$300 million when DPA-Chile is established.
“DPA-Chile, if approved, will represent the next step in our DPA business strategy for Latin America,” said Andrei Mikhalevsky, Managing Director Fonterra Global Ingredients and Foodservice.
“Since it was formed in 2002, Fonterra’s joint venture with Nestle, DPA, has grown dairy consumption, as well as local milk production, in Brazil, Ecuador, Venezuela, Colombia and Argentina.