•  Emmi ups stake in Kaiku from 42.6% to 66%
  •  Emmi stake in Diprola rises to 63%
  •  Wants to generate half of revenues overseas

Swiss dairy group Emmi has increased its stake in France's Diprola and Spain's Kaiku as it looks to expand internationally.

Emmi has become a majority shareholder in both Kaiki and Diprola, now holding more than 60% of the shares in each group.

The move reflects Emmi's strategy to reduce its dependancy on the Swiss market, where growth is limited. In the medium term, Emmi has indicated it wishes to grow international sales to 50% of group revenue, up from just under 30% today. The company said this growth would be achieved organically and through acquisitions.

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Emmi strengthens its international business

Emmi increases stakes in Kaiku and Diprola

Lucerne, 3 July 2012 - Emmi aims to cultivate further international growth and generate an equal share of its sales in Switzerland and abroad in the medium term. Increasing its stakes in Kaiku Corporación Alimentaria in San Sebastián, Spain (from 42.6 % to 66 %) and Diprola S.A. in Avignon, France (to 63 %) will further strengthen the Group's international business. This move sees Emmi investing in two healthy companies in the areas of fresh products and cheese.

In the medium term, Emmi's strategy is to increase the share of sales attributable to its international business to 50 % (currently 29.8 %). This growth is to be achieved organically and through acquisitions. By increasing these two stakes, Emmi is taking a further significant step forward in its internationalisation.

Kaiku: a milk processor with an international network

Emmi has increased its stake in the northern Spanish company Kaiku Corporación Alimentaria from 42.6 % to around 66 %, having acquired the company shares required to do this from several of Kaiku's minority shareholders. The respective agreements were signed in San Sebastián on 2 July 2012. The deal will be completed in August.

Urs Riedener, CEO of Emmi, commented: "Kaiku is a healthy company which has seen consistent growth in recent years. By increasing its stake, Emmi is strengthening its position in a company whose innovative product and marketing concepts offer significant future potential. The Kaiku Group's solid organic growth demonstrates the importance of this acquisition for Emmi."

Kaiku's main markets are Spain, Chile and Tunisia. The company known for innovative and established brand concepts is market leader in Northern Spain with regional brands and leads the Spanish market in the area of lactose-free milk and chilled coffee beverages. In 2011 Kaiku generated sales of EUR 278 million, what is equivalent to a high single-digit percentage growth, compared to the previous year. Thanks to the partnership with Kaiku, sales in Spain of Emmi Caffè Latte, produced in Ostermundigen (Switzerland), increased by more than 70 % in the first five months of the current year, a growth rate bigger than in any other market.

Enhancing international growth

Kaiku's particular advantage is its broad geographical diversification: over half of the company's sales are in fast growing markets outside Spain, notably in South America (in particular Chile, where the company holds a majority stake in Surlat). It is also successful in Tunisia, where it has a majority shareholding in Vitalait, the country's No. 2 player. Emmi's increased participation in Kaiku will enable it to benefit from rapid and strong growth in these markets. In addition, discussions with Ekarpen, the leading Basque Economic Development Corporation, with regard to a participation in Kaiku, are at an advanced stage.

There is consensus among all shareholders that Kaiku should remain a strong regional company, whilst pushing ahead with internationalisation. A capital increase is therefore planned in order to raise the necessary financial means for the company to pursue this growth strategy.

Diprola: Better cultivation of core markets for Swiss cheese

Since January 2008 Emmi and the Italian cheese specialist Ambrosi S.p.A. have been expanding the distribution of Swiss and Italian cheeses in France through the jointly owned company Ambrosi Emmi France. In January 2010 the two companies acquired a combined 25 % stake in the French cheese packaging specialist Diprola S.A.S, specialized on freshly packaged cheese, which operates in the market under the name ETS Schöpfer S.A.S. The company operates in France and Germany.

On account of the excellent partnership and attractive prospects for the fresh packaging specialist Diprola, Emmi and Ambrosi decided to fully acquire the French SME, which is headquartered in the city of Avignon, with effect from 1 July 2012. From then on, Emmi will be the majority shareholder with a stake of 63 %. The company commands a strong position in the fresh packaging ("frais-emballé") and distribution of cheeses from Switzerland, Italy and France, and so Diprola's new owners are also open to a future partnership with a French cheese provider.

Tapping the trend for freshly packaged goods

Freshly packaged cheese ("frais-emballé") has been a growth segment in Emmi's key European markets for a number of years, and is also becoming increasingly popular in the Swiss retail trade. Freshly packaged goods combine the consumer trends for fresh products and convenience, and also have numerous benefits (e.g. quality assurance) for retailers. The acquisition of Diprola will enable Emmi to increase its access to know-how in this specialised area of cheese packaging, while also allowing it to further strengthen its position in the European cheese market by exploiting the export potential of Swiss cheese even better in the future. The move will also secure Emmi's access to the distribution partner of the Italian company A-27 (Bontà Divina) in France, the most important market for the specialist in fresh desserts, which was acquired by Emmi last summer. 

Original source: Emmi AG