Fonterra looking to the future in Saudi Arabia

Fonterra Brands managing director for Middle East, Africa and CIS, Amr Farghal (left), and Mark Wilson, Fonterra's regional managing director for Asia, the Middle East and Africa.
Fonterra Brands managing director for Middle East, Africa and CIS, Amr Farghal (left), and Mark Wilson, Fonterra's regional managing director for Asia, the Middle East and Africa.
Misunderstood by many in the West, the Middle East is proving a lucrative and growing dairy market for Fonterra. Agribusiness editor Neal Wallace reports that brands such as Anchor, Anlene and Anmum are leading that growth.

It is the size of the market and the growing wealth of the region that excites Mark Wilson.

The statistics of the catchment roll off the tongue of Fonterra's director for Asia, Middle East and Africa: 40 countries of which 15 are significant in size; total population of 615 million with an average age of 25; market size $NZ17 billion - and those figures exclude India and China.

While much attention has been focused on the potential of Asia, Mr Wilson said Middle East and east African countries which Fonterra regularly sells to, encompass a population of 41.5 million, and a potential dairy market of $1.7 billion.

They are wealthy, many are flush with petroleum exports and like to drink milk.

The region is also an example of how Fonterra has a horses-for-courses market strategy - tailoring its business to particular markets.

In the highly competitive United States dairy market, Fonterra abandoned initial plans of selling branded products, avoiding taking head-on the food giants of Kraft and Nestle, in favour of selling commodities and supplying food ingredients.

In Asia and the Middle East (AME) it's policy is to manufacture locally recognised products, sell commodities and branded products, and Mr Wilson said Fonterra has successfully built brand equity around its core products of Anchor milk powder, Anlene, a calcium rich product that enhances bone health, and the specialist maternal product Anmum.

Mr Wilson said Anchor was the number two selling product in its range in AME, Anlene and Anmum number one, and Fonterra food services products rated first in dealing with bakeries, and number two in casual restaurants.

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