Campina plans to buy Satro

The value of the planned acquisition has not been revealed, but Satro has an annual turnover of €110m from the spray-dried, agglomerated and mixed semi finished products for the food and vending industries.

If the planned acquisition receives the regulatory approvals it needs, Satro will be folded into Campina's DMV International, which operates under its Industrial Products group, from January 1 2008.

Frans Visser, managing director of Campina's Industrial Products group said: "The new combination will allow us to better cope with the increasing price and competitive pressure, while serving our customers even better."

While soaring dairy prices proved beneficial for its Milner brand cheese businesses in full year 2006, sharp rises in milk powder and whey were not beneficial to the value-added ingredients segment.

However the company is serious about its value-added strategy since it is seen as an area of high potential growth.

Competition is stiff in milk market, on the other hand, and while consumption is falling in Campina's home market of The Netherlands.

As part of the shift, Campina announced earlier this year that it would sell its Belgian soft cheese factory near Passendale to French firm, Bongrain, as well as close its Dutch milk facility in Heiloo by the end of 2008.

Other benefits of the proposed acquisition of Satro are said to be that it will boost Campina's presence in the German market.

The product arrange that Satro brings with it, meanwhile, will have more of an international outing, thanks to the geographical reach of DMV's sales network.

There is also an expectation that the new owner will be able to inject some new technologies into Satro's product line-up, since DMV boasts strong R&D competencies.

Indeed Campina said in May that it will spend €18m overall in the next two years to improve innovation.

Campina Industrial Products reported a turnover of €3.6bn in full year 2006 - up 1.5 per cent on the previous year.

Results for Industrial Products were not broken out, but Visser said he expects the acquisition of Satro to lead to above market growth rates for DMV.

As for Humana's plan once it have divested Satro, the dairy cooperative is restructuring to concentrate on consumer products.

Satro's products have applications in the areas of dairy and instant desserts, bakery, instant savoury foods, and beverages.