French dairy giant Danone has bought two New Zealand plants
for an undisclosed sum, one of them in South Otago, co-owned
by Dunedin businessman Grant Paterson.
Danone's local subsidiary Nutricia will buy Mr Paterson's
Gardians drying plant near Balclutha, which he started in a
joint venture with Brent Sutton, from Sutton Group.
The other acquisition is Sutton Group's Auckland blending and
The purchase is to make up for dairy supplies lost when
Danone ended its supply contract with Fonterra last year, and
will allow it to maintain and possibly increase its exports
Mr Paterson said his 18 South Otago dairy farms were not part
of the deal and they would subsequently become ''the major
supplier'' to Danone.
A Danone spokeswoman contacted in Australia said Danone
intended to use the ''full capacity'' of both plants to
''fill our increasing needs, in New Zealand and Australia''.
''This acquisition is an investment in growing the Danone
Nutricia footprint, in New Zealand and Australia to start
with, and potentially within the wider Asia Pacific region,''
she said. An industry source suggested there would be large
expansion investments in the respective plants.
Separately, Danone and Fonterra are headed to court over last
year's botulism scare and recalled products. Danone said in
its full year results last month it had lost 370 million
(NZ$597 million) of sales because of the scare, while the
cash impact was 291 million.
Danone's net profit slumped 15% in 2013 after the food safety
warning by Fonterra, its key supplier, which forced Danone to
launch a recall in Asia.
Construction of the Gardians plant near Balclutha on a 4ha
site began in September 2011. It was operational the
following year, with the target of finishing 20,000 tonnes of
dairy nutritional products a year.
''This transaction [plant acquisitions] will provide Nutricia
with a large milk drying capacity, along with a long-term
fresh milk supply access,'' the company said in a statement
in Paris last Thursday.
''It will also add an infant formula blending and packing
facility to Nutricia's existing operations platform.''
The purchase was subject to regulatory approval and was
expected to be complete in the next few months, Danone added.
Sutton Group and Gardians (Greenfields, Agricultural
Research, Dairy Innovation and Nutritional Systems) are among
the infant formula companies which last week gained
registration to export to China under new food safety
regulations, BusinessDesk reports.
Nutricia itself gained registration, as did Fonterra
Co-operative Group, GMP Pharmaceuticals and Dairy Goat
Co-operative (NZ). They represent about 90% of New Zealand's
infant formula exports to China by volume.
Other companies can be registered after the May 1 deadline,
although owners of infant formula brands who cannot
demonstrate a close relationship with a manufacturer could
struggle to meet Chinese requirements, Food Safety Minister
Nikki Kaye said on Friday.
China telegraphed its new requirements to the New Zealand
Government last week by releasing an audit of a sample of New
Zealand manufacturers conducted in March, leaving officials
and companies scrambling to interpret the changes before the
May 1 registration deadline.
Nutricia's local arm recorded $373 million worth of sales in
2012, and delivered a profit of $61 million to its parent,
Additional reporting by AFP/BusinessDesk.