New Australian impact investment firm Blue River has bought Fonterra Australia-owned fresh milk processing group Wagga Wagga for an undisclosed sum.
The firm, set up by former Macquarie global group executive director Craig Shapiro and ex-Allen & Overy Australia senior partner Grant Fuzi, said it would guarantee Wagga Wagga’s 20 dairy farm suppliers’ annual contracts for 40 million litres, as well as offer all current staff employment.
Fonterra, which divested some of its assets last year, said the sale was part of its strategy to focus on its core businesses. Wagga Wagga’s flagship brand is Riverina Fresh, which supplies fresh milk to domestic cafés. Fonterra is consolidating its operations in Tasmania and Victoria as well as its cheese production.
“Divesting the Wagga Wagga business follows the divestment of non-core assets, including our yoghurt and dairy desserts business, our Bega shares and our stake in Dairy Technical Services,” said Fonterra Australia’s newly appointed managing director René Dedoncker.
He added that the company had been building on its businesses in Victoria and Tasmania by commissioning a new beverages plant in Cobden, a new cheese plant planned in Stanhope and invested in a joint venture agreement with Chinese baby food company Beingmate.
Blue River will expand Riverina Fresh’s retail client base as part of its growth strategy. Its milk is mostly sold wholesale to cafés across Australia, while retail sales are limited to the Riverina region.
The firm’s impact investment strategy includes targeting businesses in cleantech, life sciences, healthcare, education and financial services as well as agribusiness.