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Swiss Dairy Foods goes into receivership

24-Sep-2002

Swiss Dairy Foods, the company formed by the merger of the dairy groups Toni and Santis, has gone into receivership after finally succumbing to its crushing debts of €547 million. The company said that the receivership meant the business would continue as normal while a buyer was found for the profitable parts of the business.

The decision will avoid the collapse of the company and the ensuing loss of jobs and disruption to the Swiss dairy sector - SDF is, after all, the second-largest dairy producer in Switzerland. All 1,600 workers at the company will therefore continue to be employed by SDF until the business is sold. Fritz Rothenbuhler of the company Wenger Plattner & Partner has been appointed the official receiver of SDF.

 

The company said in a statement that while the decision to place the company into the hands of the receiver would have serious consequences for the Swiss dairy sector, it had had no other option in the light of its massive debt burden and the lack of likely improvement in the company's situation in the future.

 

SDF's banks have offered it a line of credit totalling SF89 million (€60.7m) to help cover its immediate costs - payments for milk deliveries to its 7,000 or so suppliers (a cost of around SF40 million) and workers' salaries (around SF10 million). The company added that around 80 per cent of the cost of milk deliveries for the August and the period from 1 to 22 September - some SF70 million - would be covered by the Swiss authorities. SDF said that these agreements were vital in order to maintain good relations with its suppliers and workers, two groups which will prove vital to its future.

 

The receivership decision will mean the immediate closure of SDF's Gossau and Lausanne production facilities, while a buyer will be sought for the sites at Lucens (which produces milk powder) and Thoune. If no buyer can be found for these facilities, they will be closed. All other SDF production sites will be put up for sale. The final decision on the future of all the sites will be taken by the receiver.

 

SDF said that its Top Cheese Switzerland unit and its stakes in other dairy companies were not affected by the decision, and that the sale of these cheese operations would proceed as planned. Compatriot group Emmi has said it would continue with its proposed bid for the cheese business, adding that it regretted the collapse of SDF as it weakened the competitive nature of the Swiss market.

 

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