Food group Glanbia has set up a joint venture in Mexico to exploit emerging markets in Latin America and Africa. Glanbia shares closed at €1.39, up just two cents.

Glanbia has entered into an agreement with Conaprole, a Uruguayan dairy, to develop dairy ingredient sales in both markets. The firms have set up a sales entity, Conabia, for this purpose.

Both firms are believed to be investing around €4 million each in the venture. Conaprole will be allowed to access Glanbia's technologies under the deal.

Conabia will initially serve markets in Mexico, the Caribbean and central and South America. Glanbia receives an exclusive right to promote Conaprole whole milk powders in Africa as part of the deal.

Glanbia group managing director Mr John Moloney said there were "considerable opportunities" available in South America and Africa.

The move is part of a Glanbia strategy to tap into new markets, particularly outside the EU. But dairy markets virtually everywhere continue to be sluggish and this year is expected to be difficult.

Profits from Glanbia's Irish dairy ingredients business have been falling but the firm believes this area can be boosted by contributions from overseas. Glanbia has made progress in addressing loss-making activities in Ireland and Britain and this has allowed it to look at new markets elsewhere.

Mr Ruben Nunez, general manager of Conaprole, said the joint venture represented a huge step in Conaprole's evolution as a multinational dairy company.

Mr Moloney said: "This agreement is highly beneficial to both parties."