News

FrieslandCampina buys into Engro

23 Dec 2016

Royal FrieslandCampina has acquired a majority stake of 51% in Engro Foods, Pakistan’s second largest dairy producer, at a cost of $450 million (€430 million).

Royal FrieslandCampina has acquired a majority stake of 51% in Engro Foods, Pakistan’s second largest dairy producer, at a cost of $450 million (€430 million).

FrieslandCampina and Engro Foods said they 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 increasing urbanisation. 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.

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

“This is a defining moment for Pakistan,” said 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.”