Danone acquires two dairy processing businesses in New Zealand

French food giant Danone plans to use New Zealand as its innovation hub for infant food production after acquiring two Kiwi dairy processing businesses, Sutton Group and Gardians.

Danone will now control Nutricia Sutton’s Auckland infant-formula processing facility and Gardians’ spray-drying plant in Balclutha.

Nutricia has also gained access to around 18 dairy farms that come under Gardians.

The products produced at the acquired firms will be supplied to New Zealand and exported to China and South East Asia.

Nutricia managing director for Australia and New Zealand Corine Tap was quoted by TVNZ as saying: "Not only will the investment help to build local businesses and expand their reach from a domestic to a global level, we expect new job opportunities will be created across the region.

"We intend on doubling the capacity of the plants to meet the considerable growth expectations.

"By merging the two businesses, we have estimated an extra 60,000 cows will be needed to meet demand by 2020."

The company said that it is still recovering from the false alarm in the Fonterra whey protein contamination scare, which resulted in recall of around 67,000 cans of Karicare.

The incident also led to a termination of its supply contract with Fonterra early this year, after which it began sourcing produce from Ireland, Australia and other producers in New Zealand.

Nutricia maintained that this merger will help them restore domestic and international trust in New Zealand’s brand, as well as promote the quality of the New Zealand dairy industry.

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Image: Danone Nutricia will use the New Zealand dairies for infant food production. Photo: courtesy of Keerati / freedigitalphotos.net.