By LIAM DANN
Fonterra and joint-venture partner Nestle are taking another step in their quest for domination of South America with plans to expand into Ecuador, Colombia and Trinidad and Tobago.
The two heavyweights of the global dairy industry yesterday announced expansion plans which include the manufacture of basic milk powders in
Ecuador and Colombia and the manufacture, marketing, sales and distribution of chilled and liquid products in Ecuador. They will also launch a chilled and liquid-product venture in Trinidad and Tobago.
Fonterra and Nestle established the 50/50 joint venture company Dairy Partners of America (DPA) in 2002 as part of a plan to boost the presence of both companies in the region.
They remain competitors elsewhere.
DPA already collects fresh milk and produces basic milk powders in Brazil and Argentina and operates chilled dairy facilities in Brazil, Argentina and Venezuela.
It has more than 3000 employees and annual turnover of nearly $700 million.
Fonterra chief executive Andrew Ferrier said the operations in Ecuador and Colombia would start on July 1 and would be incorporated in the existing DPA regional management structure.
DPA chief executive Hugo Lanthermann said last year that he expected the joint venture to cover all of South America by the end of 2005.
The company would then have a strategy in place to push on into the more lucrative Canadian and US markets, he said.
He expected total revenue to exceed US$1 billion ($1.5 billion) by the end of 2006.
Columbia - with a population of about 40 million - had a dairy market worth $5.7 billion in 2002.
But it also has a reputation as one of South America's most dangerous countries because of the long-running battle between the Government and leftist rebels.
* Fonterra yesterday confirmed that it had raised $100 million in medium-term debt from New Zealand institutions.
The move was part of the company's strategy to reduce its reliance on short-term borrowing and replace it with a more conservative mix of medium and long-term borrowing.
Last year the company raised US$165 million in a private placement with institutional investors in the United States.
