Fonterra chief executive for Asia-Pacific Judith Swales says covid-19 caused significant disruption to the Indian market.
Dairy co-operative Fonterra and India’s Future Consumer agreed to wind down a small joint venture in India after significant challenges caused by covid-19.
The co-op entered the joint venture as a capital-light way to test the Indian market, which has a large dairy consuming population but restrictive trade access for New Zealand dairy, Fonterra chief executive for Asia-Pacific Judith Swales says.
The co-op invested just under $3 million per year over four years. Total turnover in FY21 was $2.6m.
However, the last few years have been challenging for the joint venture with covid-19 causing significant disruption to the Indian market, Swale said.
The 50:50 joint venture – Fonterra Future Dairy – was set up in 2018 and has 22 employees, who will all receive appropriate entitlements, she said.
At the time, Fonterra said consumer demand for dairy in India was set to increase by 82 billion litres over the next seven years, seven times what was then forecast for China.
She said the joint venture has delivered some important initiatives, including the launch of the Dreamery range of consumer products made using Indian milk and distribution of Fonterra’s New Zealand Anchor Food Professionals products for the foodservice sector.
Fonterra will continue to have a presence in India through Anchor Food Professionals and its ingredients business and “will explore opportunities to grow access for our New Zealand milk as they come up”, she said.
