N.B. farmer-owned Dairytown to merge into Agropur

A New Brunswick butter and powdered milk processor owned by the province’s dairy producers is set to become Agropur’s latest dairy processing play in Atlantic Canada.

Agropur, the major Quebec dairy co-operative whose products include the Natrel, Quebon, Allegro, Olympic and Island Farms brands, announced an agreement in principle Thursday for a merger with Sussex, N.B.-based Dairytown Products.

A “final agreement” on the deal is expected within the next few weeks, after which Dairytown’s “beneficiaries” — the province’s 207 active dairy producers — will vote on the proposed deal. Financial terms were not discussed in Thursday’s release.

The deal is also subject to a due-diligence review and “the usual authorizations,” such as from the federal Competition Bureau, Agropur noted Thursday.

Dairytown, which employs almost 190 people at Sussex, makes butter, skim milk powder, custom milk powder blends and whey protein concentrate for retail, foodservice and further-processing clients and produces its own Dairytown brand of butter.

The company began operating at Sussex in 1984 and receives about 50 per cent of the province’s milk production, according to a 2007 study of the province’s dairy industry.

A merger “will allow the producers of both organizations to benefit from the advantages of being part of a large national co-operative, and to better serve customers across the country,” Dairytown chairman Jim Walker said in a release Thursday.

“This agreement is consistent with our desire to keep dairy processing assets in the hands of producers wherever possible,” Agropur president Serge Riendeau said in the same release. “It will also increase our critical mass in the region and help secure our long-term presence in Atlantic Canada.”

Agropur’s expansions into Atlantic Canada in the past year include a takeover of Nova Scotia-based Cook’s Dairy and a similar merger with Farmers Co-operative Dairy, maker of the Farmers and Central Dairies brands. — AGCanada.com Network

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