Published at 00:57 (GMT) 28 Aug
More on Fonterra strategy news out on Wednesday; NZ Herald: Fonterra says it plans to spend about NZD1.17 billion on taking a 20% stake in China's Beingmate Baby & Child to boost its baby formula aspirations there and on a major expansion of its New Zealand processing facilities.
In a move that follows several other significant strategic investments over the last 18 months, Fonterra said it would spend about NZD615 million on taking a 20% stake in Beingmate, which has a 10 per cent share of China's infant formula market, and NZD555 million on installing new processing capacity in the Waikato and in Southland.
When asked whether Fonterra had done sufficient "due diligence" to avoid a repeat of the Sanlu experience, chief executive Theo Spierings said Fonterra was "completely" different to what it was six years ago.
On FX, ongoing focus on the huge Fonterra plans, revealed on Wednesday. Also the decision to maintain farmgate milk payout at NZD6 per Kg, despite expectation of another cut after the NZD1 per kg cut. Fonterra also expects firmer dairy prices, giving support to NZD. NZD rose to 0.8381 from 0.8330-35 on Fonterra news. Though good to watch for any M+A related sales linked to Fonterra 20% stake in Beingmate. Bids now 0.8340-50/ more at 6-month lows 0.8311.
AUD/NZD back up at 1.1150-52, with AUD steady at 0.9334-37, ahead of Aust Q2 Capex data for Q2 at 0130GMT. For any fall, AUD/NZD offers at 1.1180-00, bids at 1.1120-30/1.1100. WL
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