Fonterra Australia managing director Judith Swales said selling the Tasmanian business will allow the co-op focus on what it does best.

Fonterra, the world’s largest dairy exporter, bought Tamar Valley Dairy out of liquidation in 2013.

The exporter has stated that the sale will not affect the company’s demand for milk in Tasmania.

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Fonterra has been under pressure in Australia with tough competition. Swales's strategy to restore profitability includes divesting some of its businesses, expanding others and launching new ones.

There are plans to rebuild its cheese factory in Stanhope, Northern Victoria, into a state-of-the-art manufacturing plant with 50% increased capacity.

Chief executive of Fonterra Theo Spierings confirmed that the sale was part of “a clear strategic plan to transform the Australian business to deliver stronger returns to farmer shareholders and unit holders”.