Campina adds value to butter oil division
International, will buy Belgian milk fat specialist Aveve Zuivel,
in a deal that brings the Dutch firm a new platform for innovations
in butter oil specialities, and improved access to industrial
clients, writes Lindsey Partos.
With annual sales of €100 million, Aveve Zuivel, will be absorbed into Campina's Buttergold division, that contributes about €300 million to the group's €3.7 billion turnover.
Butter oil, the clarified portion of milk, cream or butter, is used as an ingredient by ice cream, biscuit, and chocolate manufacturers; as well as industrial bakeries and ready-meal manufacturers.
Campina claims the deal slots neatly into the Buttergold division's strategy for "adding value to milk fat, for both retail and industrial markets."
Without disclosing terms of the agreement, Campina said it expects the takeover to be completed by 28 February, with full integration by the end of the year.
The Dutch firm declined to state the precise improvements in market positions through the Aveve acquisition, only telling FoodNavigator.com that, "Aveve is active in more countries than Campina in butter oil and butter oil specialities."
Aveve Zuivel, with 65 employees, asserts its main sales markets are Germany, France, the Netherlands, Belgium, Italy and Spain.
Campina is slated to strengthen its standing, on completing the deal, for applied industrial (as opposed to consumer), milk fat products in various EU markets, such as Germany, France, the Netherlands.
The second appeal for the Dutch dairy group is the Belgian firm's technological know-how. "They are very innovative company that will offer a good base for new innovations," said the Campina spokesperson.
The division will build on 'added-value' concepts that, the firm claims, already helps it to distinguish stand out from the competition; by focusing on "low-fat butter concepts, butter that spreads straight out of the refrigerator and appealing packaging, such as butter tubs."
With the right supplementary technologies, new sales opportunities arise in consumer and industrial markets, adds Campina.
The move is yet another example of consolidation in the food industry, increasingly witnessed as suppliers huddle together to face a tougher, global, food market.
Leo Faes, managing director of Aveve Zuivel sums up the move: "This takeover will give us an opportunity to develop further and become stronger in a market in which upscaling has become inevitable."
But consolidation on a far grander scale is soon to impact Campina with its imminent move to merge with Denmark's Arla Foods, creating the world's largest farmer-owned dairy company.
Combined the two leading European dairy co-operatives with 27,000 employees, to be called Campina Arla, will have annual revenues of €10 billion.
The ingredients division would contribute about a tenth of this figure, some €1.38 billion, rolling over 665 000 tonnes of ingredients.
"By joining forces the company will become an even more attractive business partner for international retailers, and the new company will establish a sound basis in a dairy world that is feeling the pressure from new EC policies," said Justinus Sanders, the new CEO of Campina Arla, and currently chairman of Campina.
Both ingredients arms - rooted in dairy based ingredients - told FoodNavigator.com it was too early to comment on the impact the merger might have on their business structure.