By PHILIPPA STEVENSON AGRICULTURAL EDITOR
The Dairy Board has struck its second big deal in a week with a move that makes it one of the strongest parties in Mexico's $13 billion dairy products market.
Its consumer products business, New Zealand Milk, has bought two of Mexico's larger dairy companies, Lamesa and
Eugenia.
They will add $220 million to New Zealand's annual dairy sales in Mexico, which total $530 million, including exports.
Last week, the board's ingredients business, NZMP, signed an agreement to sell the bulk of American skim milk powder. That made NZMP the world's biggest participant in the $4.6 billion market.
NZ Milk managing director David Pilkington said the Mexico purchase was subject to approval by regulators, which was expected in the next month.
The Latin American dairy market has traditionally been made up of many small companies but has been rapidly consolidating.
NZ Milk, which will be part of Global Dairy Company from its establishment in October, will become the leading supplier in Mexico's $1.3 billion cheese market, with a 16 per cent share.
The next main supplier has 14 per cent market share. Nearly half of cheese sales are still made by many small organisations.
Mr Pilkington said the board gained a beach head in the Mexican cheese market with the 1996 purchase of the Noche Buena cheese business, which has annual sales of around $90 million.
Cheese is an important item in the daily diet of more than 100 million Mexicans and consumption is growing at 9 per cent a year. It is eaten as an appertiser, a topping or as a main dish, replacing meat or eggs.
The deal will also make GlobalCo one of the top three players in the spreads market, which is dominated by Unilever in margarine with a 65 per cent share. New Zealand expects to rank third with 10 per cent of margarine sales, behind a Mexican company with 16 per cent of the butter market.
The Lamesa and Eugenia companies market a range of dairy products produced at three manufacturing sites from local milk and imported dairy ingredients.
They have more than 2000 staff and their major brands are La Mesa for cheese and Eugenia and Delicia in spreads.
