Fonterra has increased its ownership in milk processor Prolesur as it looks to streamline its operations in Chile.
The New Zealand-based co-operative has acquired a further 13.6% shareholding for NZD$29.3 million in Prolesur held by Fundación Isabel Aninat. This brings its total ownership from 86.2% to 99.9%.
Processing milk in southern Chile, Prolesur sells most of its production to Soprole, a consumer branded dairy company in Chile 99.9% owned by Fonterra.
Fonterra CEO AMENA Kelvin Wickham says this move will allow Fonterra to simplify the interface between Prolesur and Soprole and take steps to better integrate the two businesses.
“Prolesur and Soprole are both strong businesses but their recent performance has been impacted by challenging market conditions,” he said.
“Having the two more closely integrated will generate operating efficiencies across the supply chain from milk collection, to processing and administration.
“It also allows us greater flexibility as we focus on realising the best value for the Co-op from our businesses in Chile in line with our new strategy.”
The remaining 0.1% of Prolesur’s shares are held by minority shareholders, which Fonterra will offer to purchase at the same price per share being paid to the Fundación for its shareholding.