Photo: Courtesty of Fonterra

New Zealand dairy company Fonterra said on Wednesday that it has decided to sell its joint venture (JV) farms in China and reduce its stake in its Chinese food manufacturer Beingmate in order to focus on the company's domestic operations. 

The firm stressed that China remains one of the most important strategic markets for the company.

"As part of Fonterra's continuous review of its asset portfolio, today Fonterra can advise farmers and unit holders that, along with the joint venture partner, it has decided to undertake a sales process for the JV farms in China," the company said in a statement on Wednesday, adding that it's in line with its strategy to focus on New Zealand milk business.

"We expect the sales of our farms to be completed this financial year and the sale of the JV farms to be completed this calendar year," it said..

Fonterra has one farming base in Yutian county, North China's Hebei Province and another farm in Ying county, North China's Shanxi Province. Also, it operates a third farm in East China's Shandong Province with its JV partner Abbott Laboratories, according to information published on Fonterra's website.

In addition, it has continued to reduce its stake in Beingmate, which on January 31, 2021 stood at 3.94 percent and is now reduced to 2.82 percent. The company said that it will continue to sell down its remaining holdings and plans to have fully divested it before the end of the financial year.

Despite continuous disinvestment in Chinese market, Fonterra said that China continues to be one of its most important strategic markets.

"We remain committed to growing the value of our Greater China business, which we'll do by bringing the goodness of New Zealand milk to Chinese customers in innovative ways and partnering with local Chinese companies," the company said.

The company's earnings before interest and tax from Greater China region rose 38 percent year-on-year to NZ$339 million ($243.45 million) for the six months ended January 31, according to the company's 2021 interim report released on Wednesday.

According to Fonterra, its products are being sold in more than 400,000 stores in China and eight major e-commerce marketplaces.