The dairy arm of New Brunswick’s Northumberland Dairy Co-operative is poised to become part of dairy co-op giant Agropur.
Agropur on Monday announced it has an agreement in place with Northumberland to take over the Miramichi, N.B.-based co-operative’s dairy processing and food distribution business, leaving Northumberland with its hardware and building supply operations.
Financial terms of the agreement — which still requires a favourable vote from Northumberland’s membership as well as the “usual regulatory approvals” — weren’t disclosed Monday.
However, Quebec-based Agropur said, the deal would give it the Northumberland co-op’s Miramichi plant, which processes 27 million litres of milk per year, plus Northumberland’s distribution centres and its brands.
The co-op, which farmers in Northumberland County incorporated in 1942 as Northumberland Co-operative Creamery Ltd., today produces assorted varieties of conventional, organic and lactose-free milk, Milk on the Moove flavoured milk, cottage cheese, butter, sour cream and eggnog.
The New Brunswick co-op’s foodservice division, meanwhile, delivers over 2,000 products including meals, snacks and dessert items to restaurant, takeout and institutional customers across the province.
The co-op’s own business expanded within New Brunswick partly through its own acquisitions. It’s bought three dairy processing and distribution operations in the province since 1991, most recently Good Corner-based Graham Farms in 2002.
The operations expected to join Agropur have annual sales of about $67 million, Agropur said Monday. The Northumberland co-op booked total sales in 2012 of $76.4 million.
An Agropur takeover of the dairy business would leave the co-op with its supply centre division, which provides “farm-related” supplies to farmers and co-op members. Northumberland since 1974 has operated a hardware and building supply business that includes a Miramichi retail store open to the general public.
“Both the hardware and dairy operations will remain in the hands of co-operatives, a strong economic model that supports community economic development wherever it is present,” Agropur president Serge Riendeau said in a release Monday.
Agropur, he said, “plans to maintain its commitment to New Brunswick and the Miramichi area in particular.”
Atlantic Canada has loomed large in Agropur’s recent expansions. Last month it wrapped up a deal to take over New Brunswick butter co-operative Dairytown Products, and in 2013 also took in Atlantic Canada’s Farmers Co-operative Dairy and Central Dairies and Nova Scotia’s Cook’s Dairy.
The larger co-op, which has sales of over $3.8 billion and over 3,500 dairy producer members, and operates plants across North America, last week also announced it would buy four former Safeway dairy processing plants in Western Canada from Sobeys. [Related story]
“The co-operative movement needs to consolidate in order to stay competitive and remain an important player in dairy processing,” Agropur CEO Robert Coallier said in Monday’s release. “This agreement will help us maintain our position as an industry leader and enhance our ability to serve our customers coast to coast.” — AGCanada.com Network