Top German dairy producer plans merger

By Oliver Nieburg

- Last updated on GMT

Related tags: Milk

Directors of Germany’s largest dairy company, Nordmilch, and Humana MilchIndustrie have proposed a merger to aid survival in a competitive international market.

Nordmilch said the joint operation should be given the go ahead in January 2010 after approval from the German Federal Cartel Office and consent of the parent cooperatives’ representatives.

“The application is to be filed soon,” it said and “the decision will be passed no later than the end of the year.”

Consolidation

A company spokesperson told DairyReporter.com: "Strong units are one of the main preconditions for the successful competition in the European market and world market."

"Against the background of volatile markets, according to unstable prices paid to milk producers, the increasing concentration in food retailing and the progressive consolidation of the dairy industry in Europe leeds Nordmilch and Humana to shape actively the future together."

The decision builds upon Nordmilch’s strategic step last year to incorporate its sales activities with those of Humana Milchindustrie to form Nord-Contor Milch.

“A comparison of the development of the dairy industry in Germany with that in neighbouring European countries clearly reveals that Germany needs further consolidation to survive in international competition in the long term,”​ said CEO Dr Josef Schwaiger.

Nordmilch in buoyant 2009

Nordmilch announced profits of €29m in 2009 and said it processed the same volume of milk as in the last financial year, in spite of consumer uncertainty amid the economic crises.

“It proved possible to keep volumes stable despite adversity in the markets – not least through strong growth in the profitable cheese sector,”​ said Schwaiger. Cheese sales were found to be up six per cent on the previous year.

Sales may have been boosted by the company’s merger with Pommernmilch, which saw the addition of an extra cheese factory serving to expand the company’s cheese capacity and secure a foothold in the Mecklenburg-Vorpommern region.

Related topics: Manufacturers, Consolidation

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