DeltaMilk Plans to Buy Cheese Activities in Bleskensgraaf

The proposed acquisition of the Bleskensgraaf cheese production plant covers the installation in Bleskensgraaf, including the production lines, land, buildings, machinery and recipes.

1 Oct 2009 --- The milk suppliers’ cooperative DeltaMilk B.A. and Royal FrieslandCampina N.V. have signed an agreement in principle for DeltaMilk to take over FrieslandCampina’s cheese production plant at Bleskensgraaf (the Netherlands). A definitive agreement is awaiting the approval of the European Commission. The transaction is likely to be concluded in the final quarter of 2009.

The proposed acquisition of the Bleskensgraaf cheese production plant covers the installation in Bleskensgraaf, including the production lines, land, buildings, machinery and recipes. The staff of about 50 will transfer to DeltaMilk. FrieslandCampina is guaranteeing the supply of raw milk to Bleskensgraaf until 1 January 2017.

Bleskensgraaf makes Gouda cheese products in both the traditional round shape and the square ‘euroblok’ cheese blocks. The facility has a production capacity of 39,000 tonnes of cheese. Turnover in 2008 amounted to some €140 million.

DeltaMilk is a milk suppliers’ cooperative consisting of 70 dairy farmers. It is based in Meerkerk (the Netherlands). Most of its dairy farmers operate in the western and central Netherlands.

DeltaMilk chairman Teunis Sterk: ‘We are pleased with this agreement in principle with FrieslandCampina. The acquisition will soon provide us with a modern production plant operated by highly qualified and experienced staff.

DeltaMilk wants to guarantee the long-term sale of the raw milk supplied by our members and had been looking for sales opportunities for new members. The acquisition of Bleskensgraaf represents a ‘forward integration’ in the dairy chain, and we want to further develop the plant into a highly professional, customer oriented cheese production outlet that seeks to acquire a distinctive position on the Dutch cheese market. We want to achieve this with the help of the managing-director designate, Henk van Bochove, who has considerable experience in the cheese-marketing sector. We are pleased to be able to acquire this first-rate location with its highly-skilled and professional workforce, who will ensure that we continue to maintain the existing level of quality.’

Cees ‘t Hart, CEO of Royal FrieslandCampina: ‘The sale of our cheese activities in Bleskensgraaf was a specific condition we had to meet to gain the European Commission’s approval for the merger between Friesland Foods and Campina. I am confident that the merger will deliver a satisfying return for our member farmers. On the other hand, I regret the fact that we were unable to hold on to a solid production plant with a dedicated and professional staff. However, the sale of the plant to DeltaMilk will provide Bleskensgraaf with a basis for the further development of its activities while allowing FrieslandCampina to satisfy the European Commission’s competition conditions.’

The formal completion of the sale will depend on the approval of the European Commission, the Member’s Council of DeltaMilk and the advice of the works council at Bleskensgraaf. The acquisition price is not being disclosed. The formal completion of the transaction is expected to be able to take place in the final quarter of 2009.