In the latest of a string of joint-venture proposals, Fonterra consumer products division New Zealand Milk plans to enter the Indian dairy market with Britannia Industries, owner of a strong India food brand.

The deal with Bangalore-based Britannia is subject to regulatory approval.

The company's annual turnover of $600 million comes mainly from the bakery business, which has a good national distribution network.

Fonterra said Britannia had expanded into the dairy sector and had identified New Zealand Milk as having the expertise and international marketing experience needed to rapidly boost its dairy business.

Fonterra chief executive Craig Norgate said the alliance would give Fonterra entry into a market of huge potential - tapping into the world's fourth-largest economy.

"India's total dairy market, at $50 billion, is one of the world's biggest," Mr Norgate said.

"Steady growth and liberalisation of India's economy has opened up attractive opportunities for investment in the country's dairy industry," he said.

New Zealand Milk managing director David Pilkington said domestic operators, via an informal market, supplied the largest sector of the Indian market.

"The $8.5 billion 'formal' market, which is growing at 9 per cent annually, is the target for Britannia and New Zealand Milk," Mr Pilkington said.

Britannia markets processed cheese, butter, dairy whiteners and ghee.

It has also expanded into liquid milks, which it is now selling in Delhi and Calcutta.

Mr Pilkington said the joint venture would further expand this product range, having identified strong growth potential in the milk and food service categories.

Fonterra previously announced joint ventures with Dairy Farmers of America, Nestle, Arla, and two Mexican dairy companies.

October 29 2001:
International Dairy Summit special report