UK dairy co-operative First Milk plans to make two acquisitions in the next two years in a bid to grow internationally and diversify its business.
Speaking at the Nantwich Show 2011 in Cheshire yesterday (26 July), First Milk’s commercial director, Richard Hollingdale, said the co-op will be looking to purchase businesses that will add new capabilities or technologies to the company.
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“As a business we will look to do another acquisition,” Hollingdale said. “We won’t buy what we can already do. It’s all about new stuff, adding value rather than just doing more of what we currently do because we do that okay anyway. So we will look to acquire another two businesses in the next two years. The Kingdom one is a perfect example of the correct fit. They’ve got capability in a very good market.”
First Milk acquired two Scotland-based cheese makers – Kingdom Cheese and Kingdom Dairies – for an undisclosed sum last month. The company said the deals would allow it to expand the portfolio of products that it offers its customers. Kingdom Dairies makes cottage cheese and soft cheese products for retailers, foodservice wholesalers and food manufacturers, First Milk said.
Hollingdale, however, said First Milk would not limit itself to buying businesses in the UK and that it would consider an overseas purchase.
“It’s all about capability, route to market or something new that we can add value to the company. At the moment we are UK-based but we will go international if an acquisition facilitates that and it’s right.”
He added: “We will look to end up with about 20% of our total business in international markets. At the moment we are between 5% to 10%.”
Last week, First Milk recorded a jump in annual profits, driven by higher branded sales. Pre-tax profits reached GBP7.2m (US$11.8m), compared to GBP360,000 a year before.
