European agricultural commodities giant, Louis Dreyfus Company, is to quit its global dairy business by mid-year.
However, the company will retain its minority stake in the 18-month old South Australian Midfield processing plant in Penola.
The move is in line with the company’s three-year strategy to exit non-core areas and focus on its core businesses, notably investments in origination markets and expansion along the processing value chain.
Chief financial officer, Federico Cerisoli, said Louis Dreyfus Company’s (LDC) dairy business accounted for just one per cent of total revenue in 2018, but demanded substantial working capital resources.
LDC was evaluating whether to implement an orderly wind down or sale to potential buyers.
“Following the exit, our only exposure to dairy will be a non-controlling stake in a dairy processing plant in Australia,” he said.
LDC entered the dairy business in 2009, originating from key suppliers in North America, Europe, Oceania and South America.
It processes and delivers mainly milk powders, lactose and whey products through its Ecoval Dairy Trade business to markets, including Asia, Mexico, North America, the Middle East and Africa.
LDC has also exited its fertiliser and farm inputs and its metals platforms in the past 18 months.
Landmark purchased the $160m Macrofertil Australia fertiliser business a year ago.