9 September 2008 - Milk Link has announced that it is in detailed discussions with Andros, the French food & dairy products company, with regards to the sale of its Staplemead Creamery, in Frome, Somerset. The deal is subject to final due diligence and both parties expect completion by the end of September.
The proposed sale is in line with Milk Link’s ingredient strategy of focusing on selected product areas to meet the demands of its major food manufacturing customers. It follows on from Milk Link’s recent agreement to increase its stake in the state of the art Westbury Dairies skimmed milk powder and butter processing facility and will secure increased efficiencies and costs savings.
Milk Link will continue to be a major supplier of ingredients to the food processing sector and its range will include SMP; butter; bulk milk, cream, & cheese; and, through its relationship with Glanbia, whey products. However, the sale of Staplemead will result in Milk Link exiting the fresh dairy ingredients sector, which represents a relatively small part of its overall ingredients business, and this will be taken on by Andros.
As part of the proposed agreement, Staplemead Dairy Products, Milk Link’s existing joint venture with Arla Foods UK based at Staplemead (which produces a range of creams, custards and flavoured milks), will also end by mutual agreement. This will be replaced by a co-packing agreement between Arla and Andros.
Andros is a privately owned French food products business, manufacturing fruit, dairy and confectionery products as well as frozen desserts. It is well known in the UK through its range of Bonne Maman preserves and dairy desserts. Its dairy division manufactures 500,000 tons of products at seven factories in France, two in Italy and one in Turkey, including yoghurts, fromage frais, milk based drinks, smoothies, and dairy desserts, and currently supplies the main UK retailers with private label products. Andros has an operation in St Ives, Cambs, but the acquisition of Staplemead will allow Andros to develop its first UK production facility.
Commenting on the announcement Neil Kennedy, Milk Link Chief Executive said, “The proposed sale of Staplemead is in line with our ingredient business strategy. It will allow us to leverage our Westbury Dairies joint venture by focusing all our SMP and butter ingredients’ production at the facility and result in increased efficiencies and cost savings for the business.
“The sale of Staplemead is in no way a reflection on the skill and commitment of our employees at the Creamery. We are therefore particularly pleased that the acquisition by Andros, who we understand have major investment plans for the site, will secure the tradition of dairy processing at Staplemead.”