Goodman Fielder has said that it has sold its New Zealand flour milling business to Japan's New Zealand to Nisshin Flour Milling in a deal valued at $51 million.

Australia's Goodman Fielder said that the Japanese firm has said that it will retail all the staff at Champion flour milling business in New Zealand. The deal is expected to be closed by February 2013.

Champion claims that it produces about 60 per cent of the country's flour and cereal-based products at its two units in Christchurch and Mt Maunganui.

Goodman Fielder chief executive Chris Delaney said that the company a long-term supply partnership has been agreed that will ensure continued supply of flour and related products to its other New Zealand businesses by Nisshin. The decision to sell the business unit is in line with the company's strategy to focus on core product categories.

"Together with the sale, we have also structured a long term supply partnership with Nisshin to ensure Goodman Fielder maintains an efficient supply of flour and related products for our business in New Zealand," said Delaney.

Goodman Fielder owns several brands including Quality Bakers, Nature's Fresh, Meadow Fresh, Tararua, Edmonds, Irvines, Champion, Chesdale and Huttons. Nisshin is the largest flour milling business in Japan and has a market share of about 40 per cent in the country.