First Milk and Milk Link announce agreeing on terms for Arla Foods UK plc to become a shareholder in Westbury Dairies Limited

First Milk and Milk Link reported Tuesday they had struck an agreement that will see Arla Foods UK Plc become a shareholder in Westbury Dairies Ltd. Westbury Dairies Ltd is a joint venture firm, owned by First Milk and Milk Link, that produces the UK’s foremost skimmed milk powder and bulk butter.

It is based in Westbury from where it operates a production facility. The terms of the agreement are such that it will result in a minority shareholding for Arla in Westbury Dairies Ltd. But even with the minority stake acquisition, Westbury Dairies is expected to retain its place as a strategically significant fit for Milk Link and First Milk.

In that regard, the firm is expected to offer continued long term balancing needs for both firms, together with Arla, in terms of their strategic needs. However, the acquisition of a minority stake by Arla in Westbury is expected to cut down the share of the costs borne by the original shareholders, Milk Link and Milk First. Other than that, it will also offer a more economic harmonizing solution for all the three firms.

But at the same time, the joint venture benefits Westbury Dairies as it secures its long term future. In that regard, Westbury Dairies will maintain its crucial role in the provision of the key harmonizing capacity required for the British dairy industry to cater to its annual climax in production. The production climax is especially geared to support the fresh liquid milk market.

The three firms in the joint venture said they will be coming up with ways to develop and grow the potential of the Westbury site to complement its current skimmed milk powder and bulk butter production capacities. Westbury Dairies spokesperson reiterated that Arla’s acquisition of a shareholding in the firm marks an upside for Westbury Dairies Ltd, the site and the wider British dairy industry.

Westbury Dairies plays a crucial role as the UK’s main milk balancing facility, said the spokesperson. Other than that, the spokesperson reiterated that given Westbury Dairies Ltd’s performance at different times of the year, being hectic at certain times and experiencing a lull at other times that results in its overall operational costs per unit being high, the stake sell stands to change this, he said.

14 Oct 2010.