The milk protein plant in Medeikiai, northern Lithuania, is being taken over by an investment group. The sale will take place retroactively to the end of May.
The Hochdorf Baltic Milk UAB milk plant was the Hochdorf Group's first milk plant in the European Union. The plant was taken over in stages, beginning in 2010. The majority shareholding in Uckermärker Milch GmbH in Prenzlau, Germany, at the end of 2014 meant that Hochdorf had a holding in a second milk processing plant in the EU, which the company said is on “an entirely different level in terms of technology and volume.”
Sale to investment group
Current low protein prices on the international market along with high milk prices caused by agricultural policies in Lithuania led to Hochdorf carrying out a reappraisal of the viability of the plant.
The plant was initially purchased due to the need for a production site in the EU area and to create synergies in the area of milk proteins. The development of the Hochdorf Group in recent years, including various additional acquisitions and shareholdings in the EU area, mean that the strategic benefit of the plant in Lithuania is significantly diminished.
Hochdorf said the sale is the first step towards reorganizing and strengthening its dairy ingredients division. This transaction involves an EBIT liability of around CHF 3.2m ($3.2m) and a total of around CHF 6.2m ($6.2m) net profits.
The contract partners have agreed not to disclose the acquisition price.