Milcobel completes sale of YSCO to Davidson Kempner

BELGIUM – Milcobel has finalized the sale of its subsidiary YSCO to Davidson Kempner Capital Management LP, with Afendis Capital Management acting as an operating partner. 

The company is now shifting its focus to its core dairy activities, including premium dairy ingredients such as mozzarella, grated cheese, and milk powder, along with consumer dairy products and distribution. 

The decision is part of the company’s plan to strengthen its dairy business while advancing discussions on a proposed merger with FrieslandCampina to establish a stronger and more sustainable cooperative.

The sale of YSCO is expected to support Milcobel’s operational goals by enhancing production processes, optimizing infrastructure, and reducing long-term debts. 

According to the cooperative, proceeds from the transaction will allow for strategic reinvestments that benefit its member dairy farmers. 

A report by the cooperative outlined plans to distribute an increased loyalty premium of €3 per 100 liters of milk delivered, which will be paid out across 2024 and 2025. 

The funds will also support targeted investments aimed at expanding production capacity and improving efficiency in dairy processing.

Milcobel CEO Peter Grugeon highlighted that the sale represents a significant step in strengthening the cooperative’s position in the dairy sector. 

He noted that the transaction enables Milcobel to operate more efficiently while delivering tangible benefits to its member farmers. 

“Reducing financial obligations is also anticipated to lower costs, potentially leading to higher milk prices.” 

Additionally, the cooperative is exploring new partnerships to reinforce its market position.

Under Milcobel’s ownership, YSCO developed into a key player in the European private-label ice cream sector, with production facilities in Belgium and France. 

The company distributes up to 190 million liters of ice cream annually, supplying nearly all major European supermarket chains. 

Despite its strong presence in the market, YSCO has faced financial difficulties, reporting losses of €11.6 million last year. 

Rising costs and challenges linked to an ERP system implementation were cited as key factors affecting profitability.

According to a report by Milcobel, the sale will enable the ice cream manufacturer to pursue opportunities in a consolidating industry where private-label products have seen an annual growth rate of approximately 5%.

 

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