Beingmate to form JV with Korean dairy to produce special infant formula for China
In a statement published earlier today, Beingmate announced its board had approved the establishment of a joint venture with South Korean infant formula manufacturer Maeil Dairies.
The joint venture, Hangzhou Beingmate Maeil Food Company, will focus on the production of special infant formula – products for premature or low-weight infants, and those with lactose intolerance and amino acid metabolism disorders – for the Chinese market.
It will also manufacture regular infant formula, milk powder, and maternal nutrition products, Beingmate said.
Beingmate will initially invest RMB 3.6m (US$566,000) in the joint venture in exchange for a 60% stake.
Maeil Dairies will put up an additional RMB 2.4m (US$377,000) in exchange for the remaining 40%.
Fonterra joint venture
In March, New Zealand dairy giant Fonterra acquired an 18.82% stake in Beingmate.
At RMB 18 (US$2.87) per share, the 18.82% stake - equivalent to 192m shares - in Beingmate set Fonterra back around RMB 3.464bn (US$553m).
The share purchase enabled Fonterra and Beingmate to move on to the "next phase" of their August 2014 global partnership - the establishment of an infant formula joint venture in Australia.
The joint venture, controlled by Beingmate with a 51% stake, will purchase a Fonterra plant in Darnum, Australia.
Infant formula and milk powder produced at the Darnum plant will be shipped to China, where Beingmate will act as the exclusive distributor of Fonterra's Anmum brand infant formula.
In an additional statement published today, Beingmate said its board had approved an investment of A$82m (US$58.5m) in the joint venture.
Fonterra and Beingmate will invest a total of A$200m (US$142.6m) in the Darnum business - including A$39.2m (US$28m) to cover the purchase of the plant.
Fonterra will meanwhile plough A$78.8m (US$56.2m) into the venture, Beingmate said.
In a statement, Fonterra, which will control a 49% stake in the joint venture, welcomed the Beingmate board approval, branding it “another milestone” in their global partnership.
“Our partnership with Beingmate is already strengthening the presence of our Anmum infant formula brand,” said Theo Spierings, CEO, Fonterra.
“Distribution through Beingmate is underway, with the first shipment landed in China in June.”
“Beingmate has an extensive distribution and sales network with significant growth potential and the company continues to pursue a leading position in the China infant formula market,” said Spierings.