Food and Beverage Business

German dairy company DMK is considering investment in Poland venture

German dairy company DMK is considering investment in Poland venture DMK Food and Beverage Business

Germany’s largest dairy group, DMK, has initiated a move to acquire its venture partner in Mlekoma Dairy, a sales and distribution business in Poland. The co-op currently holds a 51% stake in Mlekoma Dairy, which it operates in collaboration with Saudi group Saudia Dairy & Foodstuff Company (Sadafco). The deal is pending competition approval in Poland as DMK aims to bolster its branded business in the country, particularly focusing on expanding its Milram brand in Poland’s foodservice and retail markets.

In 2018, Sadafco acquired Polish dairy group Mlekoma, which had an existing venture with DMK. Subsequently, Sadafco became a partner in the Mlekoma Dairy venture alongside the German co-op. The impending deal will solely concern the Mlekoma Dairy business, with Sadafco retaining ownership of Mlekoma’s dairy-processing factories in Poland.

Recently, DMK announced plans to shut down one of its domestic facilities and reduce capacity at three others due to declining milk production volumes. The co-op will close its site in Dargun, while facilities in Edewecht, Hohenwestedt, and Everswinkel will undergo capacity reductions. Approximately 150 employees will be affected by these measures, slated for implementation by spring 2025. DMK, with approximately 7,000 employees, intends to engage in discussions with impacted staff to explore their options.

In terms of financial performance, DMK reported a turnover of €5.5bn ($5.9bn) in 2023, remaining consistent with the previous year. However, the co-op’s earnings declined from €22.7m in 2022 to €13.2m in 2023, attributable to “extreme market distortions” causing significant devaluations of stocks, particularly in the cheese sector.

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