USA – Surlat, a Chilean dairy company and subsidiary of Emmi has merged with its competitor Quillayes to strengthen Emmi’s presence in Latin American.

The merger has resulted into a new company, Quillayes Surlat, in which Emmi subsidiary Kaiku will hold a majority stake of 51.5 %.

Major Swiss milk processor Emmi currently holds 73.5% of the shares in Spanish subsidiary Kaiku.

The transaction, which will result in the newly founded company becoming number four in the Chilean dairy market, is subject to approval by the local competition authorities. Details of the transaction were not disclosed.

The move also comes at a time when the American market is recording strong demand for more sustainable products marked by the growing number of vegan consumers.

Growing international presence

Emmi is focusing on strengthening its international presence as a key pillar of the company’s growth strategy. The company and its subsidiaries currently have a presence in 14 countries.

In Latin America, Emmi has established its presence supported by investments in Mexican company Mexideli and the recent increase in its stake in Brazilian company Laticínios Porto Alegre Indústria eComércio S.A.

This is in addition to its presence in the Chilean market through a local company Surlat, in which its majority stake in Spain’s Kaiku Group. The merger further consolidates its footprint in the market.

“The merger strengthens Emmi’s presence in Chile, reinforces our involvement in Latin America and opens up new potential,” explains Emmi chief executive Urs Riedener.

According to Emmi, the economic situation in Chile is stable in comparison with other Latin American countries.

Surlat’s focuses are UHT milk and other dairy products, with strong emphasis on lactose-free products while Quillayes is a well-established dairy brand, producing cheese, yogurt, butter and cream in Southern Chile and Calera de Tango.

In 2018, Quillayes generated sales of some CLP 50,000 million (US$70.7 million) while Surlat recorded net sales of around CLP 70,000 million (US$101 million) in 2018.

As a result of the move, Emmi’s sales in Chile are expected to rise to approximately US$171.7 million.