Royal FrieslandCampina N.V. has acquired a majority stake of 51 percent in Engro Foods – Pakistan’s second largest dairy producer, in partnership with the World Bank Group’s International Finance Corporation and the Dutch development bank FMO.
Through the strategic alliance, Engro Corporation will remain a significant shareholder and partner in Engro Foods.
The execution of this transaction, as approved by competition commission and other relevant authorities, is one of the single largest private sector Foreign Direct Investment (FDI) in Pakistan in recent years, amounting to a total investment of USD 450 (430 million Euros).
FrieslandCampina and Engro Foods expect to take advantage of the conversion of the market from loose to packaged dairy consumption, which is expected to accelerate in the near future as a result of the growing middle income class, a desire for higher quality milk as well as the increasing urbanization. As part of Business Group FrieslandCampina Consumer Products Asia, Engro Foods will continue to operate under its own name.
Following the completion of the acquisition, Hans Laarakker will be appointed CEO ad interim. He will replace Babur Sultan, who has decided to leave the company after spending a decade in senior leadership roles within the Company since its inception. As Vice President M&A and Business Development, Laarakker was closely involved in the preliminary phase of the acquisition. Hans Laarakker was Managing Director of FrieslandCampina Malaysia (Dutch Lady Malaysia) and also responsible for FrieslandCampina Singapore, Hong Kong and China from the year 2006 until 2010. He joined FrieslandCampina in 2003.
Roelof Joosten, CEO Royal FrieslandCampina N.V. said: “The cooperation with Engro Foods will accelerate FrieslandCampina’s route2020 strategy. Through this well organized and highly successful company we will obtain a significant presence in the Pakistani dairy market in which a growing middle class is buying more processed 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. Also we look forward to contribute to Pakistan’s agricultural sector through knowledge transfer based on our established dairy development program.”
With a track record of success spanning over a decade, Engro Foods has played pivotal role in offering Pakistani consumers hygienic and affordable solution in the drinking milk and specialized tea creamer segment through its flagship brands Olper’s and Tarang.
“This is a defining moment for Pakistan,” commented Hussain Dawood, Chairman of Engro Corporation. “We believe this transaction will be instrumental in positioning Pakistan as an attractive investment destination for global companies and encourage others to follow. 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 for our shareholders.”
Source: Food Ingredients First
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