China: Fonterra finds finance to support business growth
Fonterra has announced it has raised $206.6M to support business growth in China.
Fonterra reports that it has raised the amount from its second bond denominated in Chinese yuan. The five year so-called “dim sum” bond will be used to finance Fonterra’s expansion across the supply chain, with the move forming part of Fonterra’s plans to produce a “farm hub” in China. Announced in September 2013, the project aims to produce 1bn litres of milk in China by 2020 by investing in company owned farms in the country. Last year Fonterra launched its premium milk brand Anchor and a new paediatric formula specifcally tailored to the Chinese market.
"Along with refinancing some of our existing China operations, we will also be using funds to support further growth in this market. This will include the further expansion of our consumer, foodservice and farming operations," Fonterra CFO Lukas Paravicini said.
Fonterra’s reputation in China has suffered in recent times, particularly following last year’s recall on products containing whey powder concentrates over concerns they were contaminated. The recall led to products by Fonterra being temporarily banned from entering Beijing and products from Danone and Abbot Laboratories being removed.
Source: Just Food