Fonterra has announced it has reached a final agreement to purchase the remaining 51% stake in Saudi New Zealand Milk products, a joint-venture dairy manufacturing facility with SADAFCO in Saudi Arabia.

The acquisition, worth NZD45 million (US$33 million), is subject to local regulatory approvals in Saudi Arabia. Fonterra will take full ownership of the factory by securing its current manufacturing capacity requirements for Middle East, Africa (MEA) and Commonwealth of Independent States (CIS) region and allowing further expansion and investment.

Saudi New Zealand Milk Products (SNZMP) currently packs and processes over 30,000 tonnes of New Zealand milk annually for Fonterra and a small number of co-packing customers.

Mark Wilson, Regional Managing Director for Fonterra Asia/Africa and Middle East said the acquisition is an important step in growing Fonterra's business in a large and growing dairy market. 

The manufacturing site was first established by Fonterra and SADAFCO in 1996, managed by Fonterra. It currently packs Anchor and Anlene milk powders and produces processed cheese and recombined feta-style white cheese for Fonterra, supplying 20 countries in the region.

The Kingdom of Saudi Arabia is a signatory to the Arab Free Trade Agreement, so products manufactured or packed by SNZMP are exported to the six GCC and 22 free trade agreement member countries free of duties.

Fonterra's consumer brands business in the Middle East, Africa and CIS covers 20 markets and is based on strong partnerships with key distributors.

Fonterra, a dairy exporter with a broad portfolio of dairy ingredients, liquid and powdered milks, cultured foods and yoghurts, butter, cheese and specialty foodservices products.