Fonterra has sold its yoghurt and dairy dessert business to its competitor Parmalat.
As part of the decision, Fonterra will relinquish ownership of manufacturing plants in Echuca and the Tamar Valley.
Fonterra has confirmed all employees at both plants will retain their jobs under Parmalat.
‘‘Our people have worked hard to improve the returns from our yoghurt and dairy dessert business, and their efforts have resulted in good performance from Tamar Valley and agreements achieved with key customers to drive volume and category growth,’’ Fonterra Oceania managing director Judith Swales said.
‘‘It is a sign of respect for their hard work that all employees at our Echuca and Tamar Valley plants have received offers of employment from Parmalat.’’
The divestment is aimed at improving Fonterra’s business.
‘‘The decision to sell our Australian yoghurt and dairy dessert business is part of a comprehensive plan to return Fonterra’s Australian business to strong and sustainable profitability,’’ Ms Swales said.
‘‘It’s no secret our yoghurt and dairy dessert business has been challenged in recent years.
‘‘The sale will allow us to focus on what we do best, and lock in our competitive position in the Australian market.
‘‘We will focus on investing in the growth of our other market-leading brands, including Western Star, Perfect Italiano, Bega and Mainland, and our recently launched Anchor brand,’’ Ms Swales said.
Fonterra has implemented a number of changes to its business in recent months, including a $120million investment in its Stanhope factory.
Chief executive officer Theo Spriggs said the changes were the result of driving a clear strategic plan to transform the Australian business to deliver stronger returns to farmer shareholders and unit holders.
‘‘We are focusing on areas where we can win a highly competitive market, and that means optimising our product mix and streamlining operations to match, and investing in higher value-add products,’’ Mr Spriggs said.