Fonterra forms Ethiopian JV to launch its first African consumer product


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Fonterra, the world's largest dairy exporter, sees "a lot of potential in Ethiopia."
Fonterra, the world's largest dairy exporter, sees "a lot of potential in Ethiopia."

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New Zealand dairy giant Fonterra has partnered with Ethiopian manufacturer Faffa Foods to launch its first African consumer product. 

New Zealand Milk Products Ethiopia - Fonterra's newly formed joint venture with Addis Ababa-based Faffa Foods - will produce, package and market Anchor brand fortified milk powder in Ethiopia.

Anchor Fortified Milk Drink, a New Zealand milk powder specifically formulated with more than 30 nutrients, will go on sale across the East African country this month. 

“The milk powder is sourced from New Zealand using New Zealand milk," ​Alan Fitzsimmons, managing director, Fonterra Brands Central Asia, Middle East and Africa, told DairyReporter, "however the final product is produced and packed in Ethiopia.”

“Production began in August this year and we will begin selling Anchor Fortified Milk Drink nationwide in September," ​said Fitzsimmons. 

“At this stage it is too soon to say what our total financial investment into this agreement will be," ​he added.

Malnourishment 'an issue'

Fonterra will control a majority stake - reportedly 70%​ - in the joint venture. Faffa Foods, which manufactures a variety of product including milk powder, cereal and snacks, will reportedly hold the remaining 30%.

While the New Zealand dairy has feet on the ground in Africa, Anchor Fortified Milk Drink will become its first African consumer product when it launches this month.

Asked why Fonterra chose to invest in the East African country, Fitzsimmons said: "We see a lot of potential in Ethiopia."

"It has the second largest population in Africa with close to 100m people and it has the second fastest growing economy in the region," ​he said.

Despite such growth, Ethiopia is among the world's most malnourished countries.

Accordingly, Fonterra worked with the Food and Nutrition Society of Ethiopia to ensure Anchor Fortified Milk Drink contains the nutrients missing from the diets of Ethiopian children.

"Malnourishment is an issue and the population needs access to an affordable product that delivers high quality nutrition," ​Fitzsimmons added.

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