Background milk
FrieslandCampina adds cheese production to the US
FrieslandCampina's acquisition of Wisconsin Whey Products is described as an acquisition of a whey ingredient producer. However, this doesn't quite sell the new venture short. FrieslandCampina is also acquiring a cheese factory, which also has farmers who supply milk.
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In today's market, where all the attention is focused on expensive whey ingredients like WPC80 and WPI90, this is considered by-catch. Yet, one of Wisconsin Whey Products' two factories actually produces cheese. This isn't surprising, because without cheese, there's no whey, unless you were to buy all the whey from cheese manufacturers elsewhere.
Wisconsin Whey Products purchases between 230 and 285 million kilograms of milk annually from several cooperatives in the region and processes it into cheese. This takes place at the factory in DarlingtonCheddar and Parmesan cheese are produced there, approximately 24.000 to 30.000 tons per year.
Cheese barrels
Not in the form consumers in Europe are familiar with from stores, but often in large cardboard boxes ("barrels"). These cheese packages then go to the food industry, such as pizza producers. Cream and lactose are also produced. However, the most important products are the whey powders: WP34, WPC80, and WPI90. These are made from our own and purchased whey. The factory in Turtle Lake produces only whey products. Wisconsin Whey Products is on the verge of a significant capacity expansion. According to reports, it will be operational in the first quarter of the new year. Approximately 16.000 tons of higher WPCs could be produced. This trade is highly valuable; WPC80 of European origin is currently trading at between €12.000 and €13.000 tons.
Wei in the spotlight
In that respect, FrieslandCampina is arriving at just the right time, but it also comes at a time when the market for "higher" whey products is receiving a lot of attention. Therefore, the acquisition cannot be a bargain. Neither party is commenting on the value of the transaction.
Seller Kyle Kachadurian isn't entirely without work after the sale. Originally a process technologist, he still runs Stainless Tech, a company specializing in the manufacture of equipment used in whey processing. He also built most of his own factories.
Three factories in the US
Once the transactions are completed, FrieslandCampina will have three production facilities in the US, plus a number of sales offices. The third location has been owned and operated since 1991 and is located in Delhi, not far from New York. This company produces hydrolyzed proteins used in infant formula and medical nutrition. All three locations will fall under the management of FrieslandCampina's Ingredients division.