3rd Jul 2014 09:57
LONDON (Alliance News) - Dairy food company Dairy Crest Group PLC Thursday said its has entered into a joint venture with UK-based Fayrefield Foods Ltd and a strategic partnership with dairy exporter Fonterra, to market and sell two new products aimed at the infant formula market.
Dairy Crest, known for brands including Utterly Butterly spreads and flavoured milk drink Frijj, is currently embarking on a major project to add value to the whey it produces, as a by-product of cheese manufacturing. Whey powder is a base ingredient used in formula for babies and infants.
Back in May, Dairy Crest announced that its was investing at total of GBP45 million at its cheese making factory at Davidstow in Cornwall to allow it to manufacture de-mineralised whey powder, which it said it expects to boost profits each year by around GBP5 million from the 2015/16 financial year.
The company said Thursday that Fonterra will receive a commission to sell all of Dairy Crest's demineralised whey production and will also provide technical and engineering support. It said the agreement has been signed for a minimum of five years.
Besides the new partnership with Fronterra, Dairy Crest also announced Thursday that it will enter into a joint venture with UK-based Fayrefield Foods Ltd, to produce galactooligosaccharide, also known as GOS, a lactose-based prebiotic widely used in infant formula.
It said it is planning a new GBP20 million capital investment at its Davidstow site to manufacture GOS, while Fayrefield Foods will provide access to the necessary enzyme and other intellectual property, and Fonterra will supply lactose and market and sell the product.
"This project is anticipated to provide an eight year cash payback for Dairy Crest," the company said.
Dairy Crest shares were trading 1.8% higher Thursday morning a 478.40 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Dairy Crest