General Mills is expanding a Yoplait production plant in Tennessee

General Mills is expanding a Yoplait production plant in Tennessee

General Mills, which holds the US licence to yoghurt brand Yoplait, is increasing capacity at a yoghurt production plant in Tennessee.

The US food giant is spending US$100m to expand its site in the town of Murfreesboro.

"The construction of a new building will create additional capacity for our growing Yoplait yogurt business," a General Mills spokesperson told just-food yesterday (30 September).

According to state officials in Tennessee, the investment will create around 80 jobs.

"When the sixth largest food company in the world chooses Tennessee to grow their business, it means our state is an integral part of a global brand," said Matt Kisber, commissioner of the Tennessee Department of Economic and Community Development.

General Mills has held the US licence for Yoplait since 1977 but its hold on the brand looks uncertain. Sodima, the licencing arm of French dairy co-op Sodiaal, one of Yoplait's owners, wants to end the agreement with General Mills, a move that has prompted the US group to seek arbitration.

Earlier this week, General Mills chairman and CEO Ken Powell told the company's AGM that the licence agreement did not allow Sodima to terminate the deal. General Mills has filed for arbitration at the International Chamber of Commerce in New York and Powell warned the process could "take months, if not years".

However, he added General Mills was in talks with Sodima and he was "hopeful" a "resolution" could be reached.

Yoplait is a joint venture between Sodiaal and private-equity firm PAI Partners. The future ownership of Yoplait looks set to change with PAI wanting to exit the venture.

Sodiaal, however, wants to keep a stake of some kind in Yoplait and there has been growing speculation over who could be interested in buying part or all of the yoghurt maker.

General Mills has been named in reports as a potential suitor but, in response to a question at the company's AGM on Monday, Powell refused to be drawn on the issue.

In the last 24 hours, it has been reported in France that PAI has mandated six banks to handle the sale of its stake.