Leicester-based Express Dairies revealed earlier today [Monday] that it is entering into a strategic alliance with Milk Link, the major farmers’ cooperative in southern England.
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Together with Milk Link, the company will develop a 50:50 joint venture in Frome, Somerset, to produce and market added value chilled packaged dairy products. The JV will also produce some of the fresh cream requirements of Express and enable cooperation on milk and cream supply.
The deal also involves the sale of Express’ UHT business and its two production facilities, the Frome Creamery, including its major milk drying facility, and Express’ flavoured-milk operations in Manchester to Milk Link for £33.1m (US$50.69m) (£32.2m cash and £0.9m of assumed debt).
The strategic alliance with Milk Link has been designed to complement the current arrangements between Express and its own dedicated farmer group, the Express Milk Partnership (EMP). It is also an important further step in the restructuring of Express and supports its debt reduction programme.
Sir David Naish, chairman of Express, said: “Our initiatives with EMP and Milk Link are major steps forward for the dairy industry, which we hope will establish a new model for integration between producers and processors.
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By GlobalData“They complement our long-established policy of co-operation and collaboration with dairy farmers through the EMP in line with the “Curry Report”, advancing our programme of restructuring the group to focus on its core activities, and assisting our debt reduction programme.”
