June 1, 2012

A memorandum of understanding have been signed by New Zealand-based Fonterra and the Netherlands-based A-ware Food Group, to construct a new cheese and dairy ingredients facility, based in the Netherlands.

Under the agreement, A-ware Food Group will operate a new cheese plant and Fonterra will operate a dairy ingredients plant alongside this.

Fonterra will process whey and lactose produced at A-ware's cheese factory to produce premium nutritional ingredients. Fonterra will supply these nutritional ingredients to its customers throughout Europe and Asia.

Fonterra CEO, Theo Spierings, said that in order to optimise returns, the company is producing more milk powders and therefore it needs alternative sources of whey to meet growth requirements as well as more lactose for global ingredient business.

"This partnership will give us greater access to both," Spierings added.