Fonterra invests in Sri Lanka

Fonterra is spending $NZ14.6 million (€7.2m) on doubling its yogurt production in Sri Lanka. The three-year project aims to provide Fonterra with 52,000 litres of milk daily, from 3000 local dairy farmers.

“Increasing our local milk supply allows Fonterra to have a buffer against the increasingly volatile international prices for milk powders and dairy products,”” says Fonterra’s local managing director Achyut Reddy. He adds: “”This investment is one of Fonterra’s largest off shore investments.”

The yogurt market in Sri Lanka has had double-digit growth in each of the past five years and consumers there are now eating more than 12,000 tonnes a year. Fonterra’s existing yogurt factory near Colombo has a capacity of six million cups a month but a new production line will boost this to 13.5 million.

Nestle is also active in Sri Lanka, already producing its own milk and collecting 35 million litres a year, through 500 collection depots and 75 chilling centres.

Fonterra’s investment comes less than a month after it bought out its major partner in Chilean company Soprole for $201 million (€127m) and only a week after it confirmed its interest in Australian co-operative Dairy Farmers.