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Merger establishes strong platform for growth

Kapiti Fine Foods merger establishes strong platform for further growth

United Milk Ltd announced today it will merge its operations with the cheese and ice creams business of Kapiti Cheeses Ltd to form a new independent player in the dairy-based food sector.

The new company will be called Kapiti Fine Foods Ltd, a business with total revenues around $60 million.

United Milk secured over 94 percent of Kapiti in the recent takeover offer for the public unlisted company, and the balance of the shares will be acquired compulsorily.

Kapiti Fine Foods Chief Executive Officer Greig Shearer said bringing the two companies together would create a new independent player in the dairy-based food sector. The new business has a broad business base that will benefit both foodservice and retail customers.

“Both of our organisations pride themselves on the excellence in product quality, and together we will ensure that we continue to create the best products for consumers,” Mr Shearer said

The merged company will build on the staff expertise, production skills and distribution strengths of both companies, which have provided a strong platform for future growth and continuing innovation

The merged company has a focus to grow strongly in a number of key markets, including the export sector.

“The two companies are of a similar total revenue size and have complementary business activities. We are strongly of the view that each of these businesses can move forward purposefully as a merged entity. This is confirmed in talking to the staff in both companies,” Mr Shearer said.

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Kapiti Cheeses chairman John Butterfield welcomed the merger.

“United Milk understands the dairy-foods industry well and as such it is the ideal partner to take Kapiti Cheeses’ highly-regarded products forward into new markets and to develop new opportunities,” Mr Butterfield said.

Kapiti Cheeses has a proven track record of success that has been largely attributable to the calibre of its people and their commitment to the business. Mr Shearer noted that Kapiti Fine Foods is committed to building on that expertise.

Kapiti Cheese was established in 1984 and has developed into New Zealand’s premier specialty cheeses and premium ice cream manufacturer, making the “Kapiti” brand a household name throughout New Zealand.

UML is a much younger company, having been formed three years ago as a joint venture between the North Island Dairy Company and Foodstuffs (Wellington). North island Dairy is a milk supply company that contracts farmers for supply of product to United Milk, while Foodstuffs (Wellington) is a cooperative company that supplies supermarkets and food stores throughout the Lower North Island – including the market leading Pak’N Save, New World and Four Square stores.

Mr Shearer said the merger of United Milk and Kapiti Cheeses fits well with the group’s plan to grow as an alternative supplier of dairy products in New Zealand.

“ What we have created is a strong and independent organisation which we expect to grow into a further success story for the New Zealand food-innovation industry.

“We already have what I believe are the best people and products in the industry, and we will now get down to the task of building on that to ensure the growth and continued competitiveness of our organisation,” Mr Shearer said.

About Kapiti Cheeses

Kapiti Cheese was established at Lindale near Paraparamu almost 20 years ago as a specialist cheese company. Today the company processes over three million litres of milk a year into specialist cheese and super premium ice cream.

The bulk of its sales are domestic, though the foodservice trade and supermarkets, but it also operates three Kapiti branded stores. Around 10 percent of its sales are exported, primarily to airlines and the hospitality foodservice sector. The company employs 170 staff.

About United Milk Products

UML, based in Palmerston North, operates as a fresh milk and cream processor, and is now producing around 80,000 litres a day for sale in the lower North Island. It produces a full range of calci, low fat products and full cream milk. The plant was purpose-built and includes a facility for producing it own plastic bottles. UML employs 40 staff and operates seven days a week.

KAPITI FINE FOODS Fully integrated dairy foods company Producing banded milk, cream, cheeses, and ice cream Total sales – around $60 million Production locations: Paraparamu and Palmerston North Total staff: 210

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