September 11, 2008

Milk Link Sets Up Sale of Creamery

By Emma Corlett Business Editor

Milk Link is selling its Somerset creamery in a deal that promises fresh investment in the site.

The dairy giant announced yesterday that it had entered detailed discussions with Andros, the French food and dairy products company, to sell Staplemead Creamery, in Frome, Somerset. The deal is subject to final due diligence but both companies expect to complete by the end of September.

The fresh dairy ingredients sector represents a relatively small part of Milk Link's overall ingredients business.

As part of the proposed agreement, Staplemead Dairy Products, Milk Link's existing joint venture with Arla Foods UK based at Staplemead - which produces a range of creams, custards and flavoured milks - will also end by mutual agreement. This will be replaced by a co-packing agreement between Arla and Andros.

Neil Kennedy, Milk Link chief executive, said: "The proposed sale of Staplemead is in line with our ingredient business strategy.

" It will allow us to leverage our Westbury Dairies joint venture by focusing all our SMP and butter ingredients' production at the facility and result in increased efficiencies and cost savings for the business.

"The sale of Staplemead is in no way a reflection on the skill and commitment of our employees at the creamery. We are therefore particularly pleased that the acquisition by Andros, who we understand have major investment plans for the site, will secure the tradition of dairy processing at Staplemead."

The proposed sale is in line with Milk Link's strategy of focusing on selected product areas to meet the demands of its major food manufacturing customers. It recently increased its stake in the state-of-the-art Westbury Dairies skimmed milk powder and butter processing facility in an efficiency and cost-cutting move.

Milk Link will continue to be a major supplier of ingredients to the food processing sector and its range will include: SMP; butter; bulk milk, cream, and cheese; and, through its relationship with Glanbia, whey products.

Privately owned Andros manufactures fruit, dairy and confectionery products as well as frozen desserts. It is well known in the UK through its Bonne Maman range of preserves and dairy desserts.

Andros has an operation in St Ives, Cambridgeshire, but the acquisition of Staplemead will allow Andros to develop its first UK production facility.

(c) 2008 Western Morning News, The Plymouth (UK). Provided by ProQuest LLC. All rights Reserved.