Future Consumer, a part of Kishore Biyani-led Future Group, on Thursday said it has decided to terminate a joint venture pact with New Zealand's dairy firm Fonterra.
The company's board at a meeting held today considered and approved the termination of joint venture arrangement with Fonterra (Europe) Cooperative, Future Consumer said in a regulatory filing.
The board has also approved the discontinuance of the business operations of the joint venture company - Fonterra Future Dairy, subject to compliance with the applicable laws and obtaining of necessary consents and approvals as may be required, it added.
The companies had inked the joint venture agreement on August 8, 2018.
"Considering the impact of Covid-19 on the operations and performance of the joint venture (JV) company, it has been decided to terminate the joint venture arrangement," Future Consumer said.
Upon the termination of the joint venture agreement, the JV firm will undertake the process of winding up the operations, subject to obtaining of necessary consent and approvals that may be required from statutory/ regulatory authorities, it added.
There is no material impact on the business of the company consequent to this termination, Future Consumer said.
The FMCG firm noted that the 22 employees in the JV entity will receive appropriate entitlements, including career transition support and access to counselling.
The last few years have been challenging for the joint venture with Covid-19 causing significant disruption to the Indian market, it stated.
"Despite this, the joint venture has delivered some important initiatives, including the launch of the Dreamery brand, a range of consumer products made using Indian milk, and distribution of Fonterra's New Zealand Anchor Food Professionals products for the foodservice sector - both of which have received positive feedback from consumers and customers," it said.
The JV was formed with an eye to cater to the rising demand for dairy in India.