Germany’s Schwaelbchen Dairy and Hochwald Foods have signed a letter of intent for long-term cooperation on the production of long-life milk and in the sales of raw milk.

Schwaelbchen managing director Guenter Berz-List said the legal independence of the company “remained unchanged” by the agreement. Schwaelbchen will take over all production of long-life milk from Hochwald, which is based in Rheinland-Pfalz, from 1 January 2017, “at the latest”.

Schwaelbchen said it will continue to focus on marketing its Green Line brand of “high-quality milk and fresh products” and its Caffreddo coffee in the states of Hesse, Rhineland-Palatinate and northern Baden-Wyerttemberg, the company said.

Hochwald said it would use its superior production capacity to produce consumer durables for Schwaelbchen. Hochwald said it has capacity for fresh and long-life dairy products across eight dairy sites. The products are sold under brands including its namesake, Baerenmarke and Elinas.

Future plans for the two companies include co-operation in the commodities sector, with Schwaelbchen delivering around 20m kgs of of milk to Hochwald sites in Hesse.

Hochwald CEO Detlef Latka said the advantages of the cooperation arrangement included “the joint optimisation of production and logistics, which makes perfect sense”.

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By GlobalData