July 3 Dairy Crest Group Plc, Britain's
largest dairy food company, said it signed a five-year deal with
New Zealand-based Fonterra Co-operative Group Ltd to
market and sell Dairy Crest's infant milk formula ingredient.
Dairy Crest said Fonterra, the world's largest dairy
exporter, will receive a commission to sell all of Dairy Crest's
demineralised whey powder that it produces at its Davidstow
cheese factory to China and other global markets.
"That's kind of confirming what market had expected in a
way, but it's a good news particularly as it's a
high-value-added product," analyst Charles Pick of Numis
Securities told Reuters.
Fonterra will also provide technical and engineering
support, Dairy Crest said.
Reuters had reported on Wednesday that Fonterra planned to
procure demineralised whey from Dairy Crest.
Dairy Crest also said it would invest 20 million pounds ($34
million) at its Davidstow site to manufacture
galacto-oligosaccharide (GOS), a lactose-based prebiotic that is
used in infant formula.
The company said it would form a joint venture with UK-based
Fayrefield Foods Ltd to produce GOS, which would also be
marketed and supplied by Fonterra.
Shares in Dairy Crest were up 0.8 percent at 473.6 pence
0850 GMT on the London Stock Exchange.
($1 = 0.5877 British Pounds)
(Reporting by Aastha Agnihotri in Bangalore; Editing by