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FrieslandCampina quiet on Indian Parag Milk Foods takeover 'rumors'

By Mark Astley+

12-May-2014

Dutch dairy giant FrieslandCampina has declined to comment on reports it is in talks to acquire a majority stake in Indian dairy Parag Milk Foods.

The Times of India, citing “people with direct knowledge” of the alleged deal, reported earlier today that Netherlands-based FrieslandCampina is in talks with current shareholders to acquire a stake of up to 75% in Parag Milk Foods.

Pune-based Parag Milk Foods markets a wide range of dairy products, including fresh and homogenized milk, ghee, butter, cheese, mozzarella, milk powder, dahi (yogurt) and chass (buttermilk), under its Gowardhan brand.

Parag also exports its Gowardhan brand to 27 countries in the Middle East, South East Asia and Africa.

When approached by DairyReporter.com regarding the reports, FrieslandCampina unsurprisingly declined to comment.

“We do not comment on rumors,” said FrieslandCampina spokesman, Jan-Willem ter Avest.

Calls made to Parag Milk Foods's offices in Pune, Mumbai, and Kolkata were not returned.

100% takeover?

The Times of India added that these alleged preliminary talks could lead to a 100% takeover of Parag Milk Foods by FrieslandCampina as private equity investors such as Motilal Oswal and IDFC Alternatives look to cash in.

DairyReporter.com approached Mumbai-based Motilal Oswal and IDFC Alternatives, but no response was received from either prior to publication.

Acquiring a majority stake in Parag Milk Foods would mark FrieslandCampina’s entry into the Indian dairy market, which at around 140bn litres is the world’s largest.

DFE Pharma, the JV between FrieslandCampina and Fonterra, in India.

FrieslandCampina’s only current interest in India is DFE Pharma, its joint venture with New Zealand dairy giant Fonterra.

The boasts production locations in the Netherlands, Germany, New Zealand and India, where it manufactures microcrystalline cellulose (MCC) at its Cuddalore plant.

Despite having no dairy presence in India, FrieslandCampina boasts an extensive network of operations across China, Malaysia, Thailand, Philippines, Hong Kong, Vietnam, Indonesia, Singapore and Japan.

FrieslandCampina, like other global dairy players, has worked to develop its business in Asia in recent years as demand for dairy products in the region increases.

Most recently, FrieslandCampina announced plans to establish a joint venture with Chinese dairy Huishan to manufacture and market a new brand of infant formula in China.