Obersteirische Molkerei (OM), the Austrian dairy co-operative, is in advanced talks to integrate its operational dairy business into rival co-operative Berglandmilch.
According to a letter sent to suppliers, other business sectors of the co-operative, including its hardware stores, forestry and agricultural technology divisions, will not be affected by the restructuring. The management and supervisory boards of OM voted unanimously in favour of the transfer. A two-thirds majority vote from OM’s member farmers during a general assembly on 15th September is required for the deal to proceed, following which the decision will move to Berglandmilch and competition authorities.
OM reported a solid equity ratio of 51.5% or €96.8 million ($103.1 million) and generates around €400 million ($426 million) in annual revenue, but handles a relatively small processing volume of 188 million kg of milk from 1,160 to 1,200 suppliers. Berglandmilch, Austria’s largest dairy player, processes 1.3 billion kg of milk annually from 8,000 suppliers. The move is intended to address consolidation pressures and funding needs, including an estimated €45 million ($47.9 million) required to modernise OM’s fresh dairy facility in Kapfenberg.
OM Managing Director Michael Riegler described the board’s decision as “the first milestone”.
Source: Agrarwelt / Der Standard
