LOL, Bongrain ink aseptic pact

Land O'Lakes is teaming up with a $3.5 billion French cheesemaker's stateside subsidiary to pursue an aseptic-products joint venture.

The nearly $6 billion Arden Hills, MN-based co-op and Bongrain SA's North American division didn't disclose the terms of the deal, which awaits due diligence and regulatory review.

The partnership, announced Dec. 8, will allow the two concerns to establish a stronger position in the aseptic industry by leveraging their combined expertise and technologies, and generating the increased level of capital necessary to remain competitive, company officials said.

"The combination of complimentary product lines and geographies are among the key elements that make our two organizations a very good fit in the aseptic area," said Jack Prince, executive VP/COO for Land O'Lakes' Dairy Foods Industrial Group.

"We are also impressed with Bongrain's commitment to success in the aseptic market and their leadership position in aseptic technologies," Prince said. "This joint venture has extremely positive implications in terms of production efficiencies, customer service and competitive position."

Bongrain views LOL's "dairy-based competencies and strong reputation in the North American market" as "very positive assets," said Thomas Swartele, CEO of Bongrain's North American Division.

"Overall, we are confident this joint venture will generate significant synergies, enable us to leverage our combined expertise and market strength, and provide the level of capital necessary to remain competitive in this technology-intensive industry," Swartele said.

LOL's and Bongrain's 1999 combined aseptic product sales were roughly $180 million.

Land O'Lakes has aseptic production facilities in Clear Lake, WI, and Northumberland, PA, as well as a Chippewa, WI-based warehouse and labeling facility.

Bongrain's North American aseptic facilities include Major Smith in New Holland, PA, and Real Fresh in Visalia, CA. Aseptic products include cheese sauces, ready-to-drink specialty beverages and puddings.

Paris-based Bongrain markets commodity and specialty cheeses, other dairy products and gourmet foods in Europe, the Western Hemisphere, Asia and Australia.

Edited by Gerry Clark,
Managing Editor, Dairy Network.com