Royal FrieslandCampina has signed an agreement to purchase 51% shares of Engro Corporation’s subsidiary Engro Foods Limited, in partnership with the World Bank Group’s International Finance Corporation (IFC) and the Dutch development bank FMO.

Engro Foods is the second largest dairy company in Pakistan.

The stake purchase in Engro Foods will enable FrieslandCampina to secure an important position in Central Asia.

"I foresee huge advantage out of this partnership for our country, stakeholders, employees, product portfolio and consumers."

Engro Foods CEO Babur Sultan said: "The collaboration with FrieslandCampina will definitely have a big impact on the development of Pakistan’s dairy value chain whilst enabling Engro Foods to offer better value to its consumers via an enriched product portfolio as well as strengthening our innovation capabilities.

"Going forward, I foresee huge advantage out of this partnership for our country, stakeholders, employees, product portfolio and consumers."

Less than 10% of tradable milk consumed in Pakistan is processed and offered in packages.

The move to packaged milk is expected to accelerate in the near future due to increased demand from the country’s growing middle class.

Royal FrieslandCampina CEO Roelof Joosten said: "The cooperation with Engro Foods will accelerate FrieslandCampina’s route2020 strategy.

"Through this well organised and highly successful company we will obtain a significant presence in the Pakistani dairy market in which a growing middle class is switching to buying more processed and packaged milk.

"Engro Foods offers us a basis on which we can build further. This acquisition will contribute to the value creation for our member farmers.

"We will also contribute to Pakistan’s agricultural sector through knowledge transfer of dairy production and our established dairy development programme."

Pakistan is the third largest producer of milk worldwide, with an annual production of 38 billion litres of milk.