Agreement on sale of Naturalac Nutrition Limited

Media Release
27 September 2006

Fonterra and Etika (NZ) Ltd reach agreement on sale of Naturalac Nutrition Limited (Horleys)

Fonterra confirmed today that it has entered into a conditional agreement to sell Naturalac Nutrition Limited (NNL) to Etika (NZ) Ltd for $7.8 million.

Etika (NZ) Ltd is a newly incorporated subsidiary of Etika International Holdings Ltd listed in Singapore, with operations based in Malaysia.

The transaction is conditional on the approval of the shareholders of Etika International Holdings Ltd, which is listed on the Stock Exchange of Singapore.

NNL, a marketer of branded sports nutrition and weight management products that trades under the Horleys brand name, was acquired by Fonterra through its legacy company Kiwi Co-operative Dairies Limited.

Fonterra Brands Managing Director Sanjay Khosla said Fonterra decided to sell NNL because it did not fit well with its ‘Winning through Brands!’ strategy.

“We are building a more focused portfolio and believe that there are better investment opportunities to create long term value for our shareholders”.

Mr Khosla said Etika is well placed to build on NNL’s success and international growth.

The sale is conditional upon Etika Shareholder approval and meeting Singapore Stock Exchange documentation.

ENDS

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