[Emmi] Emmi strengthens its business in South America

Media Release

Emmi strengthens its business in South America

Emmi increases its stake in Brazilian company Laticínios Porto Alegre Indústria e Comércio S.A.

Lucerne, 18 June 2019 - Emmi is increasing its stake in Laticínios Porto Alegre Indústria e Comércio S.A., based in Ponte Nova in the state of Minas Gerais (Brazil) from 40 % to 70 %. Emmi has held a stake in the dairy since July 2017, which has continued to develop positively since then and is now among the top three largest dairies in its primary market of Minas Gerais. The acquisition of the majority of the shares is subject to approval by the local competition authority.

As of 3 July 2017, Emmi acquired a 40 % stake in the Brazilian dairy Laticínios Porto Alegre. Since then, the company has continued its positive development in an extremely challenging market environment. With a view to strategically strengthening its international business, Emmi decided to increase its stake to 70 %, subject to the approval of the local competition authority. It has been agreed not to disclose the price of the stake.

At the time of the initial investment, Laticínios Porto Alegre was one of the five largest milk processors in Minas Gerais. It has since grown into one of the top three. One of the reasons for this positive development in a very challenging environment is the excellent work of the local management, which maintains very good relations with milk suppliers and customers. Laticínios Porto Alegre has strong market positions in the natural cheese, mozzarella and requeijão (cream cheese) segments, as well as in UHT milk, cream and butter. Laticínios Porto Alegre is also a leading player in the business with whey powder, which is mainly supplied to the Brazilian food industry. In 2018, Laticínios Porto Alegre achieved net sales of around BRL 630 million (CHF 160 million) and employed around 1,250 people.

Investment in the future

With the acquisition of a majority stake, Emmi is underlining its willingness to invest further in the development and expansion of the company together with its local partners. The remaining 30 % of the company, founded in 1991, remains in the hands of brothers José Afonso and João Lúcio Barreto Carneiro. João Lúcio Barreto Carneiro and his team are responsible for the successful growth of Laticínios Porto Alegre and will continue to drive the company forward in the future as Chairman of the Board and Managing Director.

Economic outlook in Brazil

With this transaction, Emmi is strengthening its presence in Latin America and building bridges beyond its existing engagements in Chile and Mexico. Brazil is the world's tenth largest retail market and the biggest in Latin America. After a difficult time in economic terms, including a two-year recession, the situation in Brazil now looks to be improving. This view is supported by the stabilisation of the inflation rate and other indicators such as the growing trade surplus or increasing foreign exchange reserves.

Contacts

Media: Emmi Corporate Communications, phone [phone],[e-mail]

Analysts: Emmi Investor Relations, phone [phone],[e-mail]

Images and further information

About Emmi

Emmi is a major Swiss milk processor. The company dates back to 1907, when it was founded by 62 dairy farming cooperatives around Lucerne. Over the past 20 years, Emmi has grown into an international, listed group. It has for many years pursued a successful strategy based on three pillars: strengthening its Swiss domestic market, growth abroad and cost management. Throughout its corporate history, Emmi's keen awareness of its responsibility to society, animal welfare and the environment has been fundamental to its mission.

In Switzerland, Emmi manufactures a comprehensive range of dairy products for its own brands and private label products for customers, including leading exports such as Emmi Caffè Latte and Kaltbach. In other countries, its products - mainly speciality products - are manufactured locally. Alongside cow's milk, it also processes goat's and sheep's milk.

In Switzerland, the Emmi Group has 25 production sites. Abroad, Emmi and its subsidiaries have a presence in 14 countries, seven of which have production facilities. Emmi exports products from Switzerland to around 60 countries. Its business activities focus on the Swiss domestic market as well as western Europe and the American continent. Half of its CHF 3.5 billion in sales - over 10 % of which stems from organic products - is generated in Switzerland, the other half abroad. It has over 6,000 employees who are also spread equally between Switzerland and other countries.

About Laticínios Porto Alegre

Laticínios Porto Alegre Indústria e Comércio S.A. with headquarters in Ponte Nova and production facilities in Ponte Nova, Mutum and Antonio Carlos in Minas Gerais and Valença in Rio de Janeiro, is a family business founded in 1991. The company is the third largest dairy in Minas Gerais, the second largest state after São Paulo in terms of population. The company has a strong position in the natural cheese, mozzarella and requeijão (cream cheese) sectors as well as in UHT milk, cream, butter and whey powder. It generated net sales of around BRL 630 million and employed approximately 1,250 staff in 2018.

Comunicado de imprensa (Media release in portuguese)

Media release of 28 April 2017

Website of Laticínios Porto Alegre (Portuguese)

Images

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