Fonterra Enters Egypt with New Partnership with Arab Dairy

Fonterra’s entry into Egypt follows news that the company has also recently signed a memorandum of understanding (MOU) with Saudi Arabia’s leading food distribution company, Arrow, to distribute Fonterra’s Foodservice products throughout Saudi Arabia.

08/04/09 Fonterra announced it has signed an agreement with Arab Dairy Products Co., one of the leading dairy companies in Egypt, to manage the franchising, processing and distribution of Anchor throughout Egypt.

The partnership includes the manufacture, packing and marketing of Anchor triangle processed cheese and jar cheese, as well as the future distribution of Anchor milk powder products.

Amr Farghal, General Manager of Fonterra Middle East said the agreement represents a great growth opportunity for Fonterra.

“Egypt has a population of more than 80 million and has a processed cheese retail market that alone is valued at over NZD350 million. With Arab Dairy’s infrastructure, we are well positioned to reach this market through our Anchor brand, which has been very successful in other parts of this region.”

Arab Dairy is currently responsible for co-packing Fonterra’s processed cheese portions which are sold in GCC and Iraq. This new agreement will extend the partnership to include the manufacturing and packing of other cheese products within Fonterra’s Anchor portfolio through a brand licensing arrangement.

Mr Farghal said he believes Arab Dairy was the best partner for this strategic move.

“Arab Dairy is the second largest cheese producer in Egypt and has a large, low cost processing and distribution infrastructure that we can tap into. The company also shares our standards on quality both from a product and marketing perspective, so we are confident that this will be a good foundation from which to build our brands in Egypt.

“Following the signing of the agreement, Arab Dairy has also agreed to invest a further NZD25 million in expanding its capacity.”

Mr Farghal added Fonterra was also excited about the opportunities this partnership might have beyond just Egypt.

“Egypt has signed free trade agreements with a number of countries in the Middle East and Africa, so our partnership with Arab Dairy could open up a gateway to a further 1 billion consumers.”

Fonterra’s entry into Egypt follows news that the company has also recently signed a memorandum of understanding (MOU) with Saudi Arabia’s leading food distribution company, Arrow, to distribute Fonterra’s Foodservice products throughout Saudi Arabia.

“Saudi Arabia is Fonterra’s most important market for consumer brands in the GCC. This deal will now allow us to establish a strong Foodservice footprint in Saudi Arabia’s bakery, hotel, restaurant and catering channels.”