Nestlé has inked a licensing agreement for UHT milk in Brazil with local dairy group Laticínios Bela Vista.

It sees Laticínios Bela Vista taking over two of Nestlé’s local facilities and part of a third, with the Swiss giant’s employees working at those factories transferring across to the Brazilian business.

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The deal will see Laticínios Bela Vista, owner of the brands Piracanjuba and Leitbom, produce and distribute Nestlé’s brands Ninho and Molico exclusively for the UHT segment under licence for a period of ten years.

Financial details have not been disclosed.

Nestlé said the aim of the deal is to increase its long-term operations efficiency in the market and to accelerate the expansion of the UHT segment based on Laticínios Bela Vista’s “recognised expertise in the milk market”.

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Marcelo Melchior, the CEO of Nestlé’s operations in Brazil, said: “This is the beginning of a partnership between companies that have a strong presence in Brazilian households. We believe that we have found the optimal partner to leverage our brands in the UHT milk segment.” 

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Under the agreement between the companies, Laticínios Bela Vista will take over Nestlé’s employees and facilities that produce UHT milks – the Três Rios and Araraquara factories and part of the Carazinho factory. 

Cesar Helou, Laticínios Bela Vista’s superintendent, said: “We believe that people are essential to increase the presence of Ninho and Molico brands in the country, in this priority segment for our group.” 

The transaction is expected to be effective by the end of the year.

Last week (22 August), Nestlé said it plans to invest BRL1bn (US$248m) in Brazil over the next three years centred on new production lines and technologies.

In May, Nestlé and New Zealand dairy group Fonterra said they were reviewing the future of their Dairy Partners America venture in Brazil, which markets chilled dairy products.