Valio dairy co-operatives to merge to enable further development services

FINLAND – Valio, a Finnish manufacturer of dairy products, announced that its milk procurement owner co-operatives Osuuskunta ItäMaito and Osuuskunta Maitosuomi are to merge ready to launch on 1 September 2019.

According to the company, the Chairman of the Board of each outgoing co-operative signed the merger agreement on Wednesday, 29 August 2018 in Helsinki. The final decision on the merger will be made by the co-operatives’ delegate meetings this autumn.

The new co-operative will be Valio’s largest single shareholder with 20 849 shares (42.7% of the total 48 861), leading also for raw milk intake at around 900 million litres per year.

The new co-operative will be named Osuuskunta Maitosuomi, domiciled in Lapinlahti, and the merger will enable the further development of services for dairy farmer entrepreneurs and greater resource efficiency.

Osuuskunta Maitosuomi has a little over 1100 dairy farmer entrepreneur members and Osuuskunta ItäMaito just under 1600.

Osuuskunta Maitosuomi’s raw milk volume intake was around 364 million litres in 2017 and ItäMaito’s some 519 million.

“The number of dairy farmer entrepreneurs in Finland has been falling by 5–7% each year for some considerable time now, which also cuts the number of members in the milk producer co-operatives.

The merger will enable us to enhance our operations and secure the future of services offered by the co-operative.

Advisory and expert services will be more effective together and serve the entrepreneurs more efficiently. And a large unit promotes specialisation. All services can be provided in Finnish and Swedish,” said Esa Kotala, Chairman of the Board of Osuuskunta Maitosuomi.

Together, the co-operatives supply nearly half of the raw milk volume taken in by Valio. Osuuskunta ItäMaito’s offices are based in Lapinlahti and those of Osuuskunta Maitosuomi in Seinäjoki.

Of the 23 dairy farmer members on Valio’s Supervisory Board, four represent Osuuskunta Maitosuomi while ItäMaito has six.

“The new co-operative’s Lapinlahti domicile puts it close to the heart of the combined operating area, which extends from Ostrobothnia to North Karelia and from Kainuu to Central Finland.

Lapinlahti’s current cheese and powder plants’ modern premises are ideal for the new co-operative’s personnel.

Most of the staff will be serving the entire territory. The new co-operative is being christened Maitosuomi (‘Milk Finland’), which aptly describes its new operating area stretching across a large part of the best milk production regions in Finland,” said Mikko Heikkinen, Chairman of the Board of ItäMaito.

The company added that the new co-operative is set to start operating at the beginning of September 2019, in which case the first election of delegates will be held in autumn 2019.

In the meantime, a Board of Directors will be elected in late 2018 for the transition period to ready the merged co-operative for operation and ensure the goals set for the merger will be met.

“Our goal is to further develop operations and focus personnel performance and resources so we can respond to the needs of the dairy farmer entrepreneurs even more effectively, and promote the prerequisites of their livelihood in the best possible way.

The merger targets the cost-efficient development of our services,” said Ilpo Lukkarinen, Managing Director of Osuuskunta ItäMaito and Reima Luomala, Managing Director of Osuuskunta Maitosuomi.

The new co-operative will be administered similarly to the current co-operatives: all members of the new body have one vote in the election of delegates.

The members exercise the highest power of decision in the co-operative and are represented by the delegates they elect.

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