FrieslandCampina Scoops Majority Stake in Pakistan’s Engro Foods

The Dutch dairy company is paying around $580 million for Engro Corp-owned Engro Foods, which sells ice creams, frozen desserts, and dairy products and whose brands include Olper's and Omoré.

 

Engro Foods is the second largest dairy company in Pakistan, which is the third largest milk producing country in the world with an annual production of 38 billion litres of milk.

 

At present less than 10 per cent of milk consumed in Pakistan is processed and offered in packages and FrieslandCampina is hoping to benefit from the conversion from loose to packaged diary consumption in the country, buoyed by a growing demand from middle income families for higher quality milk.

 

Roelof Joosten, CEO of FrieslandCampina, said: “The cooperation with Engro Foods will accelerate FrieslandCampina’s route2020 strategy.”

 

“Through this well organised and highly successful company we will obtain a significant presence in the Pakistani dairy market in which a growing middle class is switching to buying more processed and packaged milk.

 

“Engro Foods offers us a basis on which we can build further. This acquisition will contribute to the value creation for our member farmers. We will also contribute to Pakistan’s agricultural sector through knowledge transfer of dairy production and our established dairy development programme.”
 
“This is a defining moment for Pakistan”, commented Hussain Dawood, chairman of Engro Corporation, the holding company of Engro Foods.

 

“This partnership enables us to provide a wider array of affordable high quality dairy products for a healthier Pakistan, especially for its younger population. Improving the wellbeing of millions of our farmers is a cause that our Group has been focused on for the past five decades.

 

“Working with FrieslandCampina, a company owned by farmers, will help us to accelerate our work on improving productivity in the dairy sector. I am convinced that this partnership will create tremendous long term value.”

 

Babur Sultan, CEO of Engro Foods, said: “This is a momentous occasion for us. Engro Foods has enjoyed tremendous success since its inception in 2006 and has become one of the most respected companies in Pakistan.”

 

“The collaboration with FrieslandCampina will definitely have a big impact on the development of Pakistan's dairy value chain whilst enabling Engro Foods to offer better value to its consumers via an enriched product portfolio as well as strengthening our innovation capabilities.”

 

“Going forward, I foresee huge advantage out of this partnership for our country, stakeholders, employees, product portfolio and consumers. At the same time, similarities in our strategic direction and corporate culture will create a strong platform for accelerated but sustainable growth for the company.”

 

FrieslandCampina is being helped financially by the World Bank Group’s International Finance Corporation (IFC) and the Dutch development bank FMO.

 

Engro Foods is headquartered in Karachi and employs around 1,600 people.

 

It has annual revenues of around $500 million. Its network of over 1,600 milk collection centres collects milk from around 150,000 farmers on a daily basis, which is then processed.