With estimates that 70-75% of the world’s population may be lactose intolerant and with total milk, yogurt and cheese consumption at over 200 million tonnes in 2011, lactose free dairy products represent a substantial opportunity for dairy manufacturers. In a comprehensive study of the lactose free dairy market across 33 countries around the world, leading food and drink consultancy Zenith International found that the most developed markets include the USA, Scandinavia, Germany and Spain.

Families are an important target market for lactose free dairy products, especially for parents who wish their family to benefit from dairy nutrients even if they are lactose intolerant. Plant and nut-based dairy alternatives such as soy beverages, are a competitive threat, but these do not always provide the nutrients that consumers can obtain from dairy. Encouraging dairy consumption is particularly important in addressing deficiencies in calcium and vitamin D.

Although lactose free dairy products are currently a niche segment, it is clear that they have considerable long term potential. Most significant opportunities lie in markets with a prevalence of lactose intolerance and where dairy consumption is rising, such as Asia and Latin America. Manufacturers are in a strong position to drive milk and dairy consumption through lactose free offerings, provided they meet the challenge of affordability for lower average incomes.

“Another vital challenge for manufacturers looking to enter underdeveloped markets is education,” comments Zenith senior analyst Laura Knight. “Consumers need to be educated about what lactose intolerance is, how lactose free dairy products can help them manage their condition and to overcome the misconception that lactose free milk is not real milk. Education of health professionals is also important, so they are encouraged to advise those who are lactose intolerant to avoid cutting dairy products from their diets and use lactose free products as a way of continuing to consume dairy without experiencing discomfort.”

There are also opportunities in more developed lactose free dairy markets to broaden the range of lactose free dairy products available and to drive consumption in non-retail channels. Given the higher price points that lactose free dairy products often command, there is great potential to help manufacturers drive value growth despite the current challenging market conditions.

The 2012 Zenith Report on Opportunity for Lactose Free Dairy contains over 110 pages of market commentary, tables and analysis, together with brand profiles. Contact Zenith International on Tel +44 (0)1225 327900 or E-mail mi@zenithinternational.com.

Muller Quaker Dairy, a joint venture between PepsiCo, and the Theo Muller Group, has started construction of a 350,000-square foot state-of-the-art yogurt manufacturing facility on an 82-acre parcel of land in Batavia, New York. The site is situated in one of the US’s most concentrated milk-producing and processing regions. The first phase of construction is scheduled to be completed in 2013.

Muller Quaker Dairy entered the US dairy market last month with innovative premium yogurt products. It is the first entry by both PepsiCo and Muller into US dairy aisles. The products – Müller Corner, Müller Greek Corner and Müller FrütUp – are initially being sold through supermarket and club retailers in the Northeast and Mid-Atlantic.

“We’re excited to introduceU.S.consumers to the types of products that have made Müller a household name in many countries around the world,” says Stefan Muller, board member of Theo Muller Group. “Our joint efforts with PepsiCo will open the door to new yogurt options that we are confident consumers are going to love.”

In addition to building the Batavia facility, Muller Quaker Dairy will source its milk supply from US dairy farmers, with the majority coming from New York State and Northeast region dairy farms. According to data from Euromonitor, demand for value-added dairy is expected to increase in the coming years. In the US, variety and innovation within the yogurt category lags behind other regions, especially Europe. US consumption of yogurt and other value-added dairy products is generally less than half that of Europe.

Parmalat has reported a 9.4% rise in EBITDA to Eur183.3 million on revenue up 6.1% to Eur2.28 billion for the first half of 2012, aided by increases in sales prices implemented last year in the Italy-based international dairy group’s main countries and higher sales volumes in Australia, Russia and Africa.

In Italy EBITDA grew by 16.0% to Eur45.9 million on flat sales of Eur482.4 million compared with the same period last year. In the Other Countries in Europe sales region, which includes the subsidiaries in Russia, Portugal and Romania, net revenues increased by 7.7% to Eur82.8 million and EBITDA rose from Eur3.3 million to Eur6.5 million chiefly as a result of a strong performance by the Russian subsidiary, which benefited from an incisive sales policy and the lower prices for raw milk.

Group EBIT at Eur96.2 million was down slightly from the Eur96.6 million reported at June 30, 2011, as operational improvements were offset by lower non-recurring activities.

Dairygold Co-op, one of Ireland’s largest dairy processors, has confirmed its post quota strategy. As a farmer owned co-operative Dairygold has committed to accept all the milk that its Members would produce post quota. Through comprehensive surveys Dairygold’s milk suppliers have themselves forecast of a 63.5% increase in milk production from 941 million litres in 2011 to 600 million litres a year extra by 2020.

In order to facilitate that expected increase, the Society has agreed a carefully planned and phased investment of Eur120 million over the next eight years to incrementally expand its weekly processing capacity by 18.5 million litres by 2020.

Dairygold’s product strategy is firmly established in cheese and dairy ingredients and its expanded product profile will focus on these core products. Dairygold’s three existing processing sites at Mitchelstown, Mogeely and Mallow have capacity for varying degrees of expansion. Sweating these existing facilities makes absolute sense for Dairygold as they offer established infrastructure, which will reduce the capital cost of expansion.

Dairygold is already investing from its existing cash reserves to increase its weekly processing capacity by 4.3 million litres (15%) by 2014. This comprises expansion at its speciality cheese plant at Mogeely and its Cheddar plant at Mitchelstown, the latter is one of the largest in Britain and Ireland.

Dairygold plans to invest Eur120 million to add another 18.5 million litres weekly capacity up to 2019. This will comprise of an upgrade of the existing dryer in Mitchelstown and the development of two 7.5 tonne/hour dryers in Mallow, one in 2015 and one in 2019 or earlier if required.

In addition to Eur120 million capital investment required for expansion an associated Eur50 million increase in working capital will also be required to accommodate the extra volumes of product with long lead times before customer payment. The Dairygold board has agreed that the investment required cannot be funded from operating surpluses, existing reserves or entirely from bank debt and an element of Member funding is required. Based on projected financials and corporate finance evaluation the Member funding required is in the order of Eur50 million.

Muller Quaker Dairy, the US joint venture between PepsiCo and Theo Muller Group, is entering the growing US dairy market with innovative premium yogurt products. These products – Muller Corner, Muller Greek Corner and Muller FrutUp – mark the first entry by either PepsiCo or Muller into US dairy aisles.

Together, PepsiCo and Muller will complement each other’s strengths and are expected to drive growth for both companies. PepsiCo brings scale as the largest food and beverage business in the US and has unmatched innovation-driven research and development programs, a robust go-to-market system, and superior marketing and brand recognition across its portfolio of 22 billion-dollar brands. Muller has decades of category leading innovation and dairy expertise, having grown to become Germany’s largest privately held dairy business, and one of Europe’s most well-known yogurt producers.

Muller Quaker Dairy aims to satisfy the increasing demand for value-added dairy products in the US, where variety and innovation within the category lags behind other regions, especially Europe. US consumption of yogurt and other value-added dairy products is generally less than half that of Europe.

The joint venture is building a new, state-of-the-art yogurt manufacturing plant in Batavia, New York. Once completed in 2013, it will be one of the largest yogurt plants in the US, and is expected to create more than 180 new jobs in upstate New York.

Worldwide, the dairy category is expected to grow more than any other through 2016, exceeding the growth of the next two food and beverage categories combined. This growth is driven by the progressively increasing consumer demand for packaged milk, yogurt and other value-added dairy products, and for other products containing dairy protein, probiotics, and calcium.

PepsiCo already holds a strong position in the global dairy products business. The company acquired Wimm-Bill-Dann, Russia’s largest dairy company, in 2011 and has been part of a successful joint venture with Almarai, Saudi Arabia’s largest dairy company, since 2009. PepsiCo has a previously stated goal of growing its global nutrition portfolio to $30 billion in revenue by 2020.

Due to declining returns from customers in the liquid market, British dairy co-operative First Milk has announced that it has no option but to reduce its liquid and balancing milk prices from 1st August. Its liquid pool price will reduce by 1.7ppl and its balancing pool price will reduce by 0.9ppl. Despite growing market pressure there is no change to First Milk’s cheese pool price.

The move follows recent milk price cuts by three major dairy processors – Robert Wiseman Dairies, Arla Foods UK and Dairy Crest - who supply fresh liquid milk into the UK market place.

First Milk’s chairman Bill Mustoe comments: “It is hugely frustrating to see further reductions from the liquid sector, which give us no option but to move our milk prices to reflect the impact these have on our co-op. I am under no illusion as to the effect these price reductions will have on our members’ businesses and their confidence in the dairy industry as a whole. The strategy for First Milk remains unchanged – we believe the route to a long term sustainable future for farmers is through accessing a broader range of products and markets.”

He adds: “I firmly believe that the current market situation will result in more farmers choosing to be part of a business that welcomes their input and allows them to shape their own destiny, rather than sitting back and allowing others to dictate it.”

The NFU (National Farmers Union) has strongly condemned the latest round of milk price cuts after three major dairy processors, who supply fresh liquid milk into the UK market place, issued notices for reductions. Robert Wiseman Dairies, Arla Foods UK and Dairy Crest have announced cuts to their milk prices paid to farmers of 1.7ppl, 2.0ppl and 1.65ppl respectively, following further significant cuts in recent months.

“This price slash comes at the expense of the average dairy farmer who is now making a significant loss for every litre they produce,” says NFU dairy board chairman Mansel Raymond. “Three processors will all cut their milk price on August 1; they all blame deterioration in commodity markets and cream prices – but none of them is taking responsibility for this dire situation.”

He continues: “For me, this just typifies everything that is wrong with this market place. It is time for liquid milk processors – and retailers and other major buyers – to take responsibility for this totally dysfunctional supply chain. It fails to address the one basic need of any business – the need to cover costs and make a profit.”

Mansel Raymond adds: “Until all retailers and processors commit to a fair and transparent supply chain, one that ensures a fair return for farmers, we will never break free from this vicious cycle of crisis after crisis in the dairy sector.”

Swiss dairy group Emmi has further strengthened its international business by increasing its stakes in Kaiku Corporacion Alimentaria in northern Spain (from 42.6 % to 66 %) and Diprola in France (to 63 %). In the medium term, Emmi’s strategy is to increase the share of sales generated by its international business from 30% to 50%. This growth is to be achieved organically and through acquisitions. By increasing these two stakes, Emmi is taking a further significant step forward in its internationalisation.

Kaiku’s main markets are Spain, Chile and Tunisia. The company is market leader in northern Spain with regional brands and leads the Spanish market in the area of lactose-free milk and chilled coffee beverages. In 2011 Kaiku generated sales of Eur278 million. Thanks to the partnership with Kaiku, sales in Spain of Emmi Caffe Latte, produced in Ostermundigen (Switzerland), increased by more than 70% in the first five months of the current year, a growth rate bigger than in any other market.

Kaiku’s particular advantage is its broad geographical diversification – over half of the company’s sales are in fast growing markets outside Spain, notably in South America (in particular Chile). It is also successful in Tunisia, where it has a majority shareholding in Vitalait, the country’s second leading player. Emmi’s increased participation in Kaiku will enable it to benefit from rapid and strong growth in these markets.

Since January 2008 Emmi and the Italian cheese specialist Ambrosi. have been expanding the distribution of Swiss and Italian cheeses in France through the jointly owned company Ambrosi Emmi France. In January 2010 the two companies acquired a combined 25% stake in the French cheese packaging specialist Diprola, which operates in the market under the name ETS Schopfer. The company operates in France and Germany.

Emmi and Ambrosi have now decided to fully acquire the French company, which is headquartered in theAvignon. Emmi will be the majority shareholder with a stake of 63%. Diprola commands a strong position in the fresh packaging (frais-emballe) and distribution of cheeses from Switzerland, Italy and France.

Freshly packaged cheese has been a growth segment in Emmi’s key European markets for a number of years, and is also becoming increasingly popular in the Swiss retail trade. The acquisition of Diprola will enable Emmi to increase its access to know-how in this specialised area of cheese packaging, while also allowing it to further strengthen its position in the European cheese market by further exploiting the export potential of Swiss cheese.

Dairy Crest, the UK’s leading dairy foods company, has received a binding offer from Montagu Private Equity to acquire St Hubert, the French branded spreads business, for a cash consideration of Eur430 million (£3441 million).

The transaction follows Dairy Crest’s announcement in March 2012 of a strategic review of St Hubert. During the review a range of options were considered but as a result of substantial interest from a number of potential purchasers it was decided to pursue a divestment.

St Hubert was purchased in January 2007 for Eur370 million (approximately £248 million). Since its acquisition Dairy Crest has increased the revenue and EBIT for St Hubert by 35% and 45%, respectively.

St Hubert has been a successful part of the Dairy Crest group and has consistently increased its market share and profitability. However, Dairy Crest has been unable to make additional synergistic acquisitions in Continental Europe as it envisaged at the time of the acquisition and it believes that greater value may be generated for shareholders through the proposed disposal of St Hubert.

For the year ended 31 March 2012, St Hubert generated EBITDA of Eur48.1 million and EBIT of Eur46.1 million. The gross assets of St Hubert at 31 March 2012 were Eur169 million (£1413 million).

Following the disposal, Dairy Crest will remain a broadly based dairy business entirely focused on the UK with strong brands including CathedralCity, Country Life, Clover and Frijj. It intends to continue to build on the success of its UK branded foods business and restore its Dairies business to a satisfactory level of profitability in the medium term.

“Over the coming months, with a strengthened balance sheet, we will be able to consider a wide range of opportunities including synergistic acquisitions in the UK,” points out Mark Allen, chief executive of Dairy Crest. “This will allow us to employ the same brand-building skills that have contributed to the strong growth of our UK brands and St Hubert’s success. However, we will only do this within strict financial criteria and where an acquisition would add value for shareholders.”

Danone is paying Eur550 million to increase its stake from 29.2% to 67% in Moroccan dairy company Centrale Laitiere. Danone has held its 29.2% shareholding since 2001.

Centrale Laitiere is Morocco’s leading dairy products company with nearly 60% of the market. It has sales of around Eur600 million in a fast-growing market and operates the country’s largest distribution platform with 30 storage hubs serving 70,000 points of sales. The Danone brand is already very well known in Morocco through products including Yawmy, Moufid and Activia, all sold by Centrale Laitiere.

The deal represents a key step in Danone’s development in Morocco. It will allow the French food and beverages group to invest more in a market with major potential, and thus support growth of the local dairy industry. The move also confirms the strategic appeal of markets in North Africa for Danone.

This acquisition is subject to the approval of relevant authorities and is expected to be finalized by the end of 2012. With a majority interest, Danone will fully integrate Centrale Laitiere into its consolidated accounts, and the transaction will be accretive for Danone net earnings per share from the first year.

Arla Foods’ board of representatives has approved the dairy group’s proposed mergers with the German Milch-Union Hocheifel and British Milk Link. The board of representatives voted in favour of the two mergers by a large majority as did the members of the MUH and Milk Link co-operatives.

Peder Tuborgh, chief executive of Arla Foods, comments: “This is an important decision and fundamentally strengthens Arla. The circle of ownership is being expanded with more owners and with owners in the UK, who all share our vision of the future – to be a strong European dairy company that operates in a global market.”

The two mergers will now be examined by the relevant regulatory authorities. Arla Foods expects to be able to carry out the mergers during the autumn of 2012.

UK dairy co-operative First Milk has delivered a robust performance and solid financial results for the year to 31 March 2012. Pre-tax profits increased from £7.2 million in 2011 to £13.3 million but £9.6 million of this figure relates to the profit made on the sale of First Milk’s shareholding in Robert Wiseman Dairies, which has been acquired by Mullar Dairy (UK).

Group turnover increased by 1% £579 million. During the year First Milk increased the milk prices paid to its farmers – farmers in the liquid pool saw their price increased by 2.9ppl, whilst those in the cheese and balancing pools saw their prices increase by 2.98ppl.

First Milk is committed to rewarding its members for the money that they have invested in the business. In the last 12 months the dairy co-operative has made two payments, in July 2011 and January 2012, which together represent a return of 6% on members’ capital for the year.

Net debt rose during the year by £3 million to £47 million, mainly as a result of increased stocks required to facilitate the growth in the sales in the company’s Lake District Cheese brand, investments at manufacturing sites and the acquisition of Kingdom Cheese and Kingdom Dairies, but reduced in February 2012 following the sale of the Wiseman stake.

£6.3 million was invested in capital projects during 2011/12 and First Milk is continuing to invest at all its sites to drive efficiencies. During the financial year First Milk was also able to recruit 195 million litres of new milk.

“We have set out a clear path to develop First Milk into an added value food business and 2011/12 was notable for the opportunities we realised, as well as the delivery of a robust financial performance in tough market conditions,” comments Bill Mustoe, chairman of First Milk. “Over the last 12 months we have bought two businesses – a soft and grated cheese operation in Fife and a sports nutrition business in Manchester. These purchases have not only enabled us to diversify our product and customer base, but most importantly they provide a broader platform to drive cash for our farmer shareholders.

Although revenue increased, due to strong growth in its Foods business, and group operating profits levels were maintained, UK dairy group Dairy Crest has reported a pre-tax loss of £10.1 million for the year ended 31 March 2012. Dairy Crest’s revenue rose by 2% to £1.63 billion during the year, with its Foods business growing sales by 10% supported by continued progress from its five key brands, which increased sales by 11%, boosted by a strong performance by Cathedral City cheese. However, revenue at the Dairies business fell by 2%.

Despite the challenging trading conditions, Dairy Crest managed to maintain adjusted profit before tax at £87.4 million but exceptional non-cash impairment charges in Dairies of £81.7 million resulted in a reported loss.

Mark Allen, chief executive of Dairy Crest, comments: “Dairy Crest’s results for the year demonstrate the continued benefit of being a broadly based business. Double digit growth in our branded Spreads and Cheese businesses has offset unsatisfactory results in Dairies. We have maintained adjusted group profits despite facing inflationary cost pressures of around £80 million this year by making annualised cost savings of around £22 million and achieving selling price increases. This has been made possible by a programme of consistent investment in developing our key brands and building a modern, efficient supply chain.”

Since the year end, Dairy Crest has announced a series of measures to restore its Dairies business to a satisfactory level of profitability in the medium term. In March 2012, Dairy Crest commenced a strategic review of its French spreads business, St Hubert, which is progressing.

Mark Allen adds: “In the current financial year, we are seeing continued strong momentum in our Foods businesses and we expect Dairies to benefit from the decisive action we are taking and our continued discipline on costs.”

Italian dairy group Parmalat has completed the intra-group acquisition of Lactalis American Group for $904 million. The deal marks Parmalat’s entry into the US dairy market, which is one of the largest in the world. It also strengthens Parmalat’s position in Latin America with the addition, to its current activities in Colombia and in Venezuela, of access to high growth markets, such as Brazil and Mexico with cheese products manufactured in Canada, the US and Europe.

Lactalis American Group operates mainly in the US in the production and distribution of cheese and other dairy products. Its portfolio of proprietary and licensed brands includes international brands, such as Galbani and President, and local brands, such as Sorrento, Precious and Mozzarella Fresca. The acquisition includes the distribution, on an exclusive basis, of the products of the Lactalis Group throughout the Americas. In 2011, Lactalis American Group reported revenues of $979.3 million and EBITDA of $84 million; its net financial assets amounted to $19.4 million as at December 31, 2012.

Arla Foods is planning two mergers in the British and German marketswhich will immediately increase its revenue by DKr9 billion (Eur1.2 billion) per year and strengthen its position as one of Europe’s leading dairy groups.

Arla Foods is seeking to complete two major mergers – with Germany’s eighth largest dairy, the co-operative Milch-Union Hocheifel (MUH), which has owners in Germany, Belgium and Luxembourg, and with the UK’s fourth largest dairy, the co-operative Milk Link.

As a result of the mergers, Arla will have, for the first time, co-operative owners in the UK, and in Germany the group of owners will be significantly expanded.

The owner representatives in Arla Foods and MUH and the members of Milk Link will make a decision on whether to merge on June 26th and the mergers will require clearance from the regulatory authorities. If the mergers are finalised and approved, Arla will be represented by owners in its four largest markets, the UK, Sweden, Denmark andGermany, and also in Belgium and Luxembourg.

The planned mergers are in line with Arla’s Strategy 2015, the key objective of which is to improve returns for its owners by, among other things, enhancing their positions in the core markets of the UK and Germany.

“Both Milk Link and Milch-Union Hocheifel are strong, well run dairy groups, which, with their product portfolios and production systems, will strengthen our business in both countries,” says Peder Tuborgh, chief executive of Arla Foods. ”In each of the three companies, the aim is to create value for our farmer owners in the form of a strong milk price. This will also be the case going forward, and our ability to deliver good results will be strengthened if these plans are realised.”

The mergers will bring Arla a significant step closer to a number of the main objectives in the group’s Strategy 2015: Arla will be the UK’s largest dairy company and will rank third in Germany; these are both stipulated objectives for Arla by 2015.

Another Arla objective is to achieve a revenue of DKr75 billion by 2015. The two companies, which will become an integral part of Arla Foods if the mergers take place, have combined revenues of approximately DKr9 billion. In 2011, Arla’s revenue amounted to DKr55 billion. Together, the companies are expected to generate revenues of DKr70 billion by 2013.

UK dairy co-operative Milk Link has produced a solid financial and trading performance over the last year. Group turnover increased by 7.1% to £628 million and EBITDA rose 15.4% to £33.7 million for the year ended 31st March 2012.

Milk Link lifted comparable profit before tax up by 42.7% to £14.3 million and the Member milk price increased by 2.5ppl during the year bringing the standard litre price to 28.5ppl. This meant that in comparison to the previous year Milk Link generated and paid out an additional £33.7 million to its Members for their milk.

Group borrowings rose by £2.1 million to £82 million. However, at the same time capital expenditure increased to £10.0 million compared to £5.5 million in the prior year.

“Despite an extremely difficult trading environment the group’s financial performance again strengthened,” says Neil Kennedy, chief executive of Milk Link. “During the year we benefited from strong commodity prices for our skimmed milk powder, cream, curd and whey products; from an increase in milk production from our Members and long term ‘direct’ suppliers; from cost savings resulting from the implementation of rigorous efficiency and productivity programmes across all areas of the business and from our continuing emphasis on cash, stock and debt management. Nevertheless, the results also reflect that Milk Link’s trading performance in our main retail and foodservice markets held up well despite highly challenging conditions. Indeed, sales both in terms of value and volume increased year on year in relation to our core Cheddar business, speciality cheese and flavoured milks.”

Milk Link has also been strengthening its processing business for the longer term by undertaking its largest capital investment programme to date. During the year, Milk Link completed two major investment programmes. The first was, as a result of a £12.5 million joint venture with Volac, the development of a state-of-the- art whey processing plant at Milk Link’s Taw Valley Creamery in Devon. A new £4 million production facility at the Trevarrian Creamery in North Cornwall was also completed by year end and to budget which has substantially increased the capacity of the creamery to meet a growing demand from major retailers and foodservice providers for its premium soft cheeses.

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the Swedish dairy products and fruit juices company Skanemejerier by French dairy giant Lactalis. The Commission examined the competitive effects of the proposed acquisition in the markets for dairy products, notably the supply of cream and the procurement of raw milk in Sweden.

The Commission’s investigation showed that the proposed transaction would not significantly alter the market structure in relation to dairy products and that the merged entity would face competitive pressure from a number of credible competitors. It also showed that the proposed transaction was unlikely to lead to a lessening of competition in relation to the procurement of raw milk, since farmers will be able to sell raw milk to third parties to the same extent as before the transaction.

Lactalis is active internationally in the dairy sector. Its core business is the production and marketing of drinking milk, butter, cheeses, fresh dairy, cream and industrial dairy products.

Skanemejerier is active in the dairy sector and especially in the markets for the production and marketing of drinking milk, fresh dairy products, cheeses, cream, butter and juice.

The acquisition of Skanemejerier, which has annual sales of Eur330 million, strengthens the international presence of Lactalis.

Glanbia, the international nutritional solutions and cheese group, has reported that international demand for dairy products has remained solid in the first three months of 2012, supported by demand from developing economies. Prices for most dairy categories have weakened in the year to date, mainly due to an oversupply of milk resulting from sustained good weather in most milk producing regions. Similarly, US cheese prices have also declined in response to strong US milk production. Robust demand for higher end whey products continues, reflecting very good demand across all sectors of nutritionals, with prices firm in the face of tight short-term supply of these key ingredients.

In the first quarter, to the period end 31 March 2012, Glanbia’s total revenue grew 1.9% when compared with the first three months of 2011. Volume was down 1.5% as lower volumes in Dairy Ingredients and Agribusiness more than offset growth in Global Nutritionals. Overall pricing was up 3.4% driven by higher year on year pricing in Global Nutritionals.

John Moloney, group managing director of Glanbia, comments: “The group is performing in line with expectations in what is a more challenging operating environment this year. We expect to deliver earnings in the first half of 2012 which are broadly similar to an exceptionally strong first half in 2011. We are successfully driving growth in nutritionals and the depth and strength of the portfolio in these dynamic growth sectors positions Glanbia well for the future. We remain focused on strong cost management and operational execution across the business. We reiterate our full year guidance of 5% to 7% growth in adjusted earnings per share, on a constant currency basis, for 2012.”

Nestle is building on its commitment to help support the development of the global dairy industry with a new partnership in Morocco. The collaboration with the local authorities in the Moroccan region of Doukkala-Abda aims to increase milk production, improve the quality of fresh milk and encourage the development of the dairy industry throughout the private sector.

The Doukkala-Abda region currently produces 22% of the milk in Morocco, sourcing over 340 million litres a year. Nestle’s partnership with the Agency for Agricultural Development and the Regional Office of Agriculture seeks to increase the company’s own milk collection in the region by 10% by 2014.

Nestle will invest more than SFr5.3 million (50 million Moroccan Dirham) over the next three years. It will help more than 10,000 farmers by providing training and expertise in milk supply, technical equipment, management and finance. Nestle began its operations in the Moroccan dairy sector in 1992. Today Nestle sources about 73 million litres of fresh milk from over 16,000 dairy farmers in the country.

Nestle’s work with farmers inMorocco is part of its approach to business which it calls Creating Shared Value. The company aims to create value for its shareholders while at the same time creating value for the communities it serves and in which it operates. Rural development is one of Nestle’s three key CSV focus areas, as well as nutrition and water.

Nestle’s new partnership in Morocco is the latest in a long-line of investments it has made to support the development of the global dairy industry. The company invested SFr127 million in a new milk products factory in Chile and opened a UHT milk factory in Sri Lanka in April. It also announced the construction of a dairy farming institute in China in January, and joined a dairy partnership in Brazil at the end of last year.

Carbery Group, the Irish and international food ingredients, flavours and cheese manufacturer, had a positive year in 2011 with revenues increasing by 14.5% to Eur256.5 million and profit before tax advancing 27.8% to Eur8.7 million. Carbery’s 2011 performance reflects an underlying strong performance from the Ingredients division whilst by contrast its Ireland-based Cheese division had a challenging year principally due to market returns for cheese under-performing relative to other dairy products.

The weak cheese markets had a significant effect on performance as Carbery is a substantial manufacturer of cheese and produces a range of cheeses including mature cheddars and reduced fat cheddars. Its flagship brand, Dubliner continues to grow in export markets, particularly in the US. Carbery’s Ingredients business, which includes its flavour business, Synergy, as well as its dairy ingredients business, had a strong year. Synergy continues to grow in existing markets and establish itself in new markets, acquiring two new flavour businesses in the US.

Like all other dairy businesses, Carbery Group is addressing the opportunities and challenges that will come with the removal of quotas in 2015. It has just completed a milk supplier survey regarding additional milk output post 2015. In short, the survey indicates that West Cork suppliers from Bandon, Barryroe, Drinagh and Lisavaird Co-ops intend to increase milk supply by up to 45% between 2015 and 2020. While Carbery has processing capability in place to handle this extra production, over the next few years it will address associated challenges such as working capital requirements and developing markets for this extra output.

As well as preparing to process and market extra product post 2015, Carbery also plans to launch a scheme whereby it will align milk supply to shareholding for milk suppliers. This scheme will address certain key issues, amongst them that of securing milk processing capability for expanding milk suppliers and that of accessing shareholding value.

University College Dublin (UCD) has signed a memorandum of understanding (MOU) with a leading Chinese dairy producer Dairy United. The MOU which will result in multi-million euro contracts for products and services, envisages the development of a China-Ireland Agricultural demonstration farm in Hohhot(Inner Mongolia), collaborative research projects, the provision of education and training services, and collaboration on the creation of a trade corridor to facilitate the introduction of Irish exporters to the Inner Mongolian region. The Dairy United/UCD link was established through contacts made by Enterprise Ireland over the past 18 months.

UCD will be collaborating with a number of Irish agricultural equipment and services companies to deliver an integrated package of education and training, research, services and technology to Dairy United.

The UCD Dean of Agriculture and Food Science Professor Alex Evans comments: “This partnership came about because of Ireland’s global reputation in dairy production and the ability of UCD and Irish agri-service companies to offer a complete solution, incorporating education, training, agricultural products and services, that meet Dairy United requirements and will form the basis of a long term relationship.”

Julie Sinnamon, executive director of Enterprise Ireland, says: “This MOU is the fruit of substantial work conducted in the past two years, between Dairy United and UCD, with the support ofEnterpriseIreland. The MOU paves the way for a range ofEnterpriseIrelandclient companies across the agri-services sector to provide world-class agri-technology and services to the China market“

Dairy United was founded in 2004 and specialises in dairy production and processing in China. Dairy United has total assets of Eur75 million and operates fifteen 1,000 cow dairy farms supported by over 2,000 ha of forage production land. Dairy United is currently undertaking an expansion strategy which will see it invest Eur360 million over the next five years for the construction of another 35 dairy farms and a modern dairy processing factory. On the completion of the expansion strategy by 2015, Dairy United will have 50 dairy farms with 100,000 dairy cattle and 20,000 ha of forage producing land, and the factory will have a daily fresh milk processing capacity of 500 tons.

Arla Foods UK has appointed Caddick Construction and NG Bailey to build its £150 million fresh milk dairy at Aylesbury in England. Caddick Construction has started on site as principal contractor, with works expecting to take 75 weeks to complete. The company will be responsible for the construction of the main dairy and the energy centre, as well as all ancillary buildings and associated site works. NG Bailey will be responsible for the mechanical and electrical engineering portion of the contract, starting on site in June 2012.

Arla Foods UK has already worked with Caddick Construction on a number of other projects, including Stourton dairy in Leeds and Westbury Dairies, and NG Bailey has also worked with Arla on various build phases at Stourton.

Once completed, the dairy will process and package up to one billion litres of milk per year. It will provide a £20 million annual wages bill, which will have a positive impact on the local economy, and will also create around 700 new jobs and up to 1,000 construction jobs over the next 18 months.

Peter Lauritzen, chief executive of Arla Foods UK, says: “We are delighted to be underway with this project. In addition to it being one of the largest construction projects in the UK, we have ambitions for it to be the world’s first zero carbon fresh milk dairy, which will help Arla achieve its growth ambitions in the UK.”

Both contractors were appointed following a six-month tender process, in which they were up against some of Europe’s leading constuction and mechanical and electrical companies.

In addition to being responsible for the installation of the mechanical and electrical works, such as boilers, air compressors, ventilation and lighting in the energy centre, across the site and throughout the main dairy building, NG Bailey will also be responsible for wastewater and effluent treatment and recycling. Alongside the engineering division, the offsite manufacture and IT services arms of the company will also play its part in the development.

NG Bailey has also been awarded the facilities management contract, which will be serviced by the company’s facilities services team.

Irish dairy co-operative Dairygold is preparing to invest Eur130 million in its processing facilities in Malow, Mitchelstown and Mogeely. The move is in preparation for the ending of milk quotas in 2015 which offers Dairygold its first real opportunity in more than 30 year for substantial dairy growth.

Dairygold currently processes about 960 million litres of milk annually (equivalent to 18% of the Irish milk pool) from its 3,000 dairy suppliers. The planned capacity expansion would allow Dairygold to process an extra 23 million litres of milk per week, in addition to its current peak of 30 million litres per week.

According to chief executive Jim Woulfe, the Dairygold team is excited about the opportunities and confident about the company`s ability to process and market up to 50% increase in milk production by 2020.

Strong returns from international dairy markets and increasing on farm milk production, which created higher processing throughputs, helped Dairygold, the Irish farmers co-operative, to generate an operating profit on its core activities of Eur22.6 million for 2011, a 19.6% increase on the 2010 figure. Dairygold’s optimisation of its product and customer mix, together with improved operating efficiencies helped to increase profitability.

Turnover in 2011 was Eur757.8 million – up 9.3% on the previous year. The increase was generated across the main business activities of dairy processing and agri trading.

Dairygold’s dairy processing division (Dairygold Food Ingredients) had a strong year. Dairygold has well invested and highly efficient processing facilities which benefited from investments of over Eur60 million in the last four years. The investment included an upgrade at Dairygold’s ingredients facility at Mitchelstown to facilitate the increased supply requirements of the expanded Danone infant formula facility at Macroom.

Dairygold chief executive Jim Woulfe comments: “In the dairy operations, improved markets and the higher throughput increased turnover and this along with continuous improvement in efficiencies helped to deliver improved results. The agri operations benefitted from increased on-farm activity which helped the performance of the fertiliser and feed businesses.”

In 2011 Dairygold invested a total of Eur33.9 million in the business – Eur15.4 million in capital expenditure and Eur18.5 million in acquiring a portfolio of strategic property assets from Reox Holdings. The co-op’s net debt was reduced by Eur13.6 million before the investment of Eur18.5 million on the acquisition of a portfolio of assets from Reox Holdings, which increased the net debt by Eur4.9 million to Eur67.2m at the year end.

Nestle has invested more than SFr127 million ($140 million) in a new factory in Chile as part of its continued commitment to developing its operations in the country. The factory will produce a range of milk products and ingredients with added nutritional value for domestic consumption and for export to the United States, Central America, the Middle East and Asia.

When fully operational, the factory will have a production capacity of 30,000 tonnes of milk powder, enabling Nestle to meet increased demand for dairy products that offer a nutritional ‘plus’. One of the most technologically advanced dairy factories of its kind in the world, it will provide 300 direct jobs and 1,500 indirect jobs.

As with Nestle’s other dairy factories around the world, the new manufacturing site is situated in a rural area close to the dairy farms that supply it with fresh milk. This not only enables Nestle to trade directly with farmers, but also to provide them with technical assistance and training to improve milk production and quality.

In Chile, Nestle sells a range of local brands including Savory ice cream, Sahne-Nuss chocolate and McKay biscuits, alongside internationally recognised brands such as Nescafe and Maggi. In 2010 the company opened its first Research and Development Centre in South America in the Chilean capital Santiago. The centre leads Nestle’s global research and development efforts for biscuits and cereal-based snacks.

Lakeland Dairies, Ireland’s second largest dairy processing co-operative, has reported an 18% increase in revenues to Eur472 million and a 52% rise in operating profit to €6.85 million for the year ended 31st December 2011.Lakeland exports to over 70 countries offering some 170 branded dairy products to customers. In 2011,Lakeland processed over 700 million litres of milk into a range of value added dairy food service products and food ingredients.

“While global economic and trading conditions continued to be difficult, it has been an excellent year for Lakeland Dairies where we are benefiting from our recent investments in advanced processing capabilities together with focused and intensive business development activities,” says Michael Hanley, chief executive of Lakeland Dairies.

He continues: “During the year, we further developed our market leading presence in Europe and expanded our position as the dairy foodservice market leader in the United Kingdom and in Ireland. We delivered specialist, value added products to the global foodservice, confectionery, bakery and other food industry sectors.  We are market leaders in emulsion technology where we provide dairy based products that delight our customers through their functionality and taste qualities in foods, whether that is in restaurants or retail.”

The turnover figure of Eur472 million was underpinned by strong sales, a maximised milk processing throughput, enhanced logistical capabilities and an ongoing operational efficiency programme across the organisation. This contributed to a further strengthening of the balance sheet with shareholders’ funds of Eur81 million at year-end.

Looking ahead, Michael Hanley comments: “The global economy has slowed with markets facing considerable uncertainties. Prices remain under pressure as food companies compete to retain market share among cost conscious consumers. There is also a global oversupply with surplus product coming onto the market from New Zealand and the United States in particular.  This will place significant pressure on milk processing returns throughout the year.  A weaker euro is required to make Irish exports more competitive. However, with continuing sales and volume increases we still anticipate further solid progress by Lakeland Dairies.”

Nestle is strengthening its dairy industry interests in Asia with the opening of a new UHT milk factory in Sri Lanka. The factory builds on the company’s recent investments in dairy development in China and India. It will produce ready-to-drink brands such as Milo and Nespray at Nestle’s existing manufacturing site in the Sri Lankan province of Kurunegala.

“Our latest investment will have a ripple effect across the local community by helping our company make a positive impact on thousands of suppliers and farmers in the country,” says Alois Hofbauer, managing director of Nestle Lanka. “The new manufacturing capabilities also mean we can produce new products for our Sri Lankan consumers.”

The SFr5.8 million factory is part of a SFr77 million (Eur64 million) total investment in Sri Lanka over the next few years. Two other factories producing Maggi noodles and Nestle brand malt beverages were opened on the site in the last 12 months.

Nestle has supported the Sri Lankan dairy sector since the 1980s. Today Nestle Lanka’s has three UHT milk factories. Nestle isSri Lanka’s single largest private sector collector of fresh milk, procuring fresh milk from over 15,000 local dairy farmers every day.

The new UHT milk factory is part of Nestle’s dairy investment programme in Asia. The company constructed a new dairy farming institute in Shuangcheng in Heilongjiang province, China, in January.

Nestle India has developed milk production in the region since it built its first factory in Moga in 1961. The company now has eight factories in the country. Over the years, Nestle has invested to develop the area around that first factory, setting up milk collection points and training farmers to improve productivity and quality.

Dairy Crest’s cost reduction programme is on track to deliver annual savings in line with the £20 million target set at the start of its financial year year. These savings have partially offset higher input costs including milk at the UK dairy group. Dairy Crest will continue to focus on reducing costs into the new financial year and expects to achieve a further similar level of annual savings.

Strong performances from Dairy Crest’s foods businesses are compensating for more challenging trading in its dairies division. However, despite the progress made in identifying and delivering efficiency savings, profits in the dairies business remain under pressure. Consequently, Dairy Crest is looking at a range of options to restore this business to a satisfactory level of profitability.

Dairy Crest’s strategy is to grow sales of its brands and other added value products, control costs and generate cash. Value sales of its five key brands (CathedralCity, Country Life, St Hubert Omega 3, Clover and Frijj) have increased during the financial year. Although sales volumes of these brands fell in the first half while Dairy Crest recovered higher input costs from its customers, a strong performance in the second half means that full year sales volumes will have increased compared to last year.

Dairy Crest will announce preliminary results for the year ending 31 March 2012 on 24 May 2012.

As a result of the margin made on a number of business activities, including efficiencies gained from investment in its manufacturing sites and supply chain, UK dairy co-operative First Milk will pay a dividend to members in April. An average 1 million litre producer will receive a dividend of £900, and this comes on top of the returns on investment for the same average 1 million litre producer of £2,700 over the last 14 months.

The First Milk board also plans to allocate a proportion of the profit made on the recent sale of the co-operative’s shares in Robert Wiseman Dairies to members, and is currently investigating the most tax efficient way to do this. These decisions do not impact on any potential return on members’ investments for the 2nd half of 2011/12 milk year, which will be decided separately once the year end numbers are finalised.

“Over the last 14 months we have made three returns on member investments and are now announcing a dividend and plans to allocate money to member capital accounts,” explains First Milk chairman Bill Mustoe. “Building a business and a supply chain that is centred squarely on delivering for members is what we’re about, and that’s obviously a different path to other companies in our sector. We will continue to pass back returns to members if and when the money is in the till.”

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Dairy Crest, the UK’s leading dairy foods company, is to commence a strategic review of St Hubert, its French branded spreads business. The review will evaluate all possible options available to Dairy Crest to maximise shareholder value, including a potential divestment of St Hubert.

Since its acquisition in January 2007, St Hubert has been a successful part of the Dairy Crest group and has consistently increased its market share and profitability. However, Dairy Crest has been unable to make additional synergistic acquisitions in Continental Europe as it envisaged at the time of its acquisition of St Hubert and it believes that greater value may be generated for shareholders through the consideration of all the available options for St Hubert.

A disposal would reduce Dairy Crest’s debt and provide it with a number of alternatives which include releasing some proceeds to shareholders, investing in its core business and making strategic acquisitions of branded businesses in the UK. This would further improve Dairy Crest’s strong position in the consolidating UK dairy market. Any acquisitions would be synergistic and made within strict financial criteria, as will any decision over the future of St Hubert.

Whatever the results of the review, Dairy Crest will continue to develop its broadly based UK business including its strong portfolio of brands (Cathedral City, Country Life, Clover and Frijj). The Dairy Crest board also intends to continue with its progressive dividend policy.

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Robert Wiseman Dairies has been delisted from the London Stock Exchange following its £279.5 million acquisition by Muller Dairy (UK), the British subsidiary of German dairy group Muller. Operating from six major processing dairies in Aberdeen, East Kilbride, Glasgow, Manchester, Droitwich Spa and Bridgwater, Robert Wiseman Dairies processes and delivers more than 30% of the fresh milk consumed in Britain, every day. Based at Market Drayton in Shropshire, Muller Dairy (UK) is the overall market leader in chilled yoghurts and potted desserts in the UK.

UK dairy co-operative First Milk has received planning approval to redevelop its cheese packing site at Maelor near Wrexham, to create a UK centre of excellence for cheese packing and storage. As well as the redesign and rebuild of First Milk’s cheese packing operation, Grocontinental, one of the UK’s leading storage and distribution companies, has also received the green light for the construction of a cold store on the Maelor site that will house all of First Milk’s maturing cheese.

Work will begin shortly on the redevelopment and is scheduled for completion in Autumn 2013. The total cost of the site redevelopment will be £17 million.

First Milk’s manufacturing director Paul Rowe comments: “This redevelopment builds on the significant investment in new technology at the site over the last eighteen months. We have had very positive feedback on our proposals from our retail customers, who can see the clear benefits from the redevelopment in terms of workflows, efficiencies and the scope it provides to increase production.”

A £100 million fresh milk dairy at Bridgwater, Somerset in England has succeeded in increasing its use of recycled water by 50% to over 300,000 litres of water every day, equivalent to the daily water use of 663 households. Known as ‘Britain’s green and white dairy’ Robert Wiseman Dairies Bridgwater facility has set the standard for environmental performance since it opened in 2009 and was the first dairy in the UK to have its own reverse osmosis (RO) plant to ensure that water leaving its on-site effluent treatment plant could be recycled and reused in the dairy.

Recycled water is returned to the mains water tank to be used across the dairy for everything from cleaning the filling lines to pasteurising the milk and significantly reduces the requirement to draw water from the local water supplies.

The RO technology was first introduced in early 2011 initially allowing around 200,000 litres of water leaving Bridgwater’s on-site effluent treatment plant to be recycled and reused. This installation has been expanded and is now providing over 35% of the water required by the dairy which has an annual production of around 500 million litres.

“Water scarcity, particularly in the south of country is a significant issue and our Bridgwater dairy has amongst the best water per litre of milk produced ratios of any dairy in the country,” says Billy Keane, managing director of Robert Wiseman Dairies. “This water recycling is another step towards meeting the target we set of reducing water use across our network of dairies by 25% by 2015 whilst also helping to further reinforce Bridgwater’s reputation as the world’s most environmentally advanced fresh milk dairy.”

Headquartered in East Kilbride near Glasgow in Scotlant, Robert Wiseman Dairies procures, processes and distributes almost a third of all fresh milk consumed inBritain, every day. The company has six dairies and a distribution network which enables the company to deliver milk to customers in every GB postcode. Wiseman is a wholly owned subsidiary of Muller Dairy (UK) and employs around 5,000 people.

Reflecting strong performances from both its Irish and US operations, Glanbia, the global nutritional solutions and cheese group, has reported a 17.9% rise in operating profit to Eur161 million on revenue up 23.3% to Eur2.67 billion for the year ended December 31st 2011. Operating margin dropped 30 bps to 6% due largely to input cost pressures in performance nutrition.

On constant currency basis, Glanbia’s US Cheese & Global Nutritionals division increased revenue by 35% to Eur1.38 billion and operating profit pre exceptional increased 21.3% to Eur113.8 million. Glanbia has invested significant resources in recent years to develop and enhance its US Cheese & Global Nutritionals division. The acquisition and successful integration of BSN into Performance Nutrition complemented strong organic revenue growth during 2011.

Positive global dairy markets underpinned a solid performance by Dairy Ireland despite the challenges of the Consumer Products business. The Dairy Ireland business grew revenue by 19% to Eur1.35 billion and operating profit pre exceptional increased 23.2% to Eur53.6 million.

“Glanbia achieved excellent results in 2011 delivering 26.7% growth in adjusted earnings per share, on a constant currency basis,” says John Moloney, group managing director of Glanbia. “We expect the operating environment in 2012 to be more challenging than in recent years. Current global economic uncertainty has the potential to impact global dairy markets and fragile consumer confidence. The group’s focus on driving growth in nutritionals, combined with deep dairy market expertise and strong execution capability, position us well for the future. Our guidance for 2012 is for 5-7% growth in adjusted earnings per share, on a constant currency basis.”

PepsiCo, the world’s second largest snacks and beverages company, and Theo Muller, Germany’s largest privately owned dairy business, have chosen New York as the site for their first yogurt production facility in the US. Through their joint venture, Wave, the companies will invest $206 million (Eur153 million) and create 186 new manufacturing and support jobs to operate the new state-of-the-art facility in Batavia.

Wave considered other locations both in and outside of New York State for the facility. After a thorough evaluation, including an assessment of access to dairy resources, water supply and distribution routes to key markets, the company chose Batavia. While the facility is being developed over two years, Wave may import Muller products in order to establish a foothold in the fast-growing US yogurt business.

Wave’s investment continues a strong recent trend of major yogurt producers opening manufacturing facilities in New York. The state currently has 29 yogurt plants, which employ more than 2,000 people and produced a total of 530 million pounds of yogurt in 2011—a 43% increase from 2010 and more than double 2008 levels.

New York State is the US leader in the production of the highly popular Greek-style yogurt. Producing Greek yogurt requires approximately three times the amount of milk than traditional yogurt, making the industry a major economic driver for dairy farmers across New York State. In 2011, more than 1.166 billion pounds of milk was used for yogurt production. This is comparable to the milk production of 500 average-size dairy farms inNew York State (115 cows/farm).

The joint venture with Muller reflects PepsiCo’s ambitions to expand in dairy. In 2010, the beverages and snacks manufacturer acquired Russian dairy and fruit juice company Wimm-Bill-Dann for $5.4 billion. PepsiCo also established a joint venture with Almarai, the leading dairy company in the Middle East, in 2009.

Muller is the leader in the UK yogurt market through its Muller Corner brand.

Despite continuing weak consumer confidence in Europe, where 80% of its business is based, Arla Foods achieved double digit growth in both revenue and earnings in 2011. Revenue rose by 12% to almost DKr55 billion (Eur7.4 billion) and Arla Foods increased the earnings for its 8,200 co-operative owners in Denmark, Sweden and Germanyby 11%, paying out a performance price of DKr2.80 for each kilogramme of milk supplied. During 2011, Arla also paid DKr1.6 billion more to the co-operative owners than in the previous year. The retained profit of DKr1.31 billion was up from DKr1.27 billion in 2010.

”These are strong results in a difficult time. Primarily because we have improved earnings for our owners to a level that is almost on par with the best we’ve ever delivered,” says Peder Tuborgh, chief executive of Arla Foods. “During an economic crisis, more consumers choose to buy discount products and fewer branded products. This has an effect on Arla’s earnings. But at the same time, we’re seeing a rising demand in markets outside Europe, which will offset the flattening growth in Europe.”

Arla’s brands helped it to grow outside Europe. Half of Arla’s revenue growth was through organic growth, in part driven by Arla’s three global brands – Arla, Lurpak and Castello. The Arla brand showed a significant growth of 8% in 2011, resulting in global revenues of DKr20.6 billion

Arla Foods has enjoyed success in new markets, particularly in MENA (Middle East and North Africa) and Russia. It also made a major breakthrough in Germany during the year following the merger with Hansa-Milch and the acquisition of Allgäuland-Kasereien.

Peder Tuborgh, chief executive of Arla Foods.

Arla Foods Ingredients (AFI), which is responsible for Arla’s global production of whey, whey proteins and ingredients for the food industry, had a strong year and was one of Arla’s most profitable business areas. Despite the rise in raw material prices, AFI succeeded in launching new products and increasing revenues by 25%.

Although Arla Foods expects to maintain growth in 2012, the year ahead will be challenging. “While 2011 was a good year for Arla, the last quarter showed slight pressure on performance, reflecting a deteriorating business environment in Europe, which has continued into 2012. We expect significant revenue growth and for profits to be on par with 2011 albeit with fluctuations in the milk price for our co-operative owners over the year,” says Peder Tuborgh.

He continues: “To secure the top-line expansion effectively converts to the bottom-line, we’re working on all fronts to improve our internal efficiency. For the group as a whole, we’re focusing on growing revenues considerably faster than costs. We’re making progress in this direction, but there’s still some way to go. We’re focusing, therefore, on creating a more structured and less complex way of working, and we expect to launch some specific initiatives in 2012.”

The European Commission has cleared the proposed creation of Senegral, a joint venture by Senoble and Agrial, two French companies operating in the dairy sector. The new joint venture will operate in the production and sale of private label fresh dairy products in France, Germanyand Benelux. The Commission concluded that the proposed transaction would not raise competition concerns, in particular because the new entity will have numerous competitors in the markets concerned.

Senoble manufactures and sells fresh dairy products such as yoghurt, fresh cheese, fresh cream. It operates in France, Spain, the UK, Italyand Slovakia in the production and sale of milk, dairy products and fruit-based beverages.

Agrial is a French agricultural co-operative group operating in particular in the milk collection sector.

Reto Conrad, chief finance officer of Emmi Group, has decided to pursue a new challenge in his career and will be leaving the Swiss dairy company at the end of May 2012. Reto Conrad joined the Emmi Group in 2005 as head of Group Controlling and designated successor to the group’s chief finance officer at that time. Since 2006, in his role as chief finance officer with responsibility for the finance and controlling, legal and tax departments, he has played an active role in supporting Emmi’s development and internationalisation, developing further the instruments required to manage the group’s finances and in building up a strong team of skilled professionals.

He will continue to carry out his duties as chief finance officer of Emmi Group until the end of May 2012. An announcement regarding his successor will be made at the appropriate time.