The German unit of Swiss food giant Nestlé is reportedly planning to sell its milk business to German diary Hochwald for an undisclosed amount.

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Nestlé is to sell the unit because the profit margins are too low, reported Dow Jones International News, citing a report in the Financial Times Deutschland. The unit, which includes two milk-processing factories, generates annual sales of €150m (US$161.4m).

Hochwald will take over Nestlé Deutschland’s Leuneberg factory in north-western Germany in June. The Leuneberg plant, which employs 150 people, produces yoghurt and desserts under the Leunebest brand name, reported the German News Digest.

In September, Hochwald will take over Nestlé Deutschland’s Weiding plant in Bavaria. The facility employs around 800 people and makes products such as Baerenmarke evaporated milk and Glueckslee fresh milk.

Hochwald Nahrungsmittel-Werke employs around 1,000 people at present and reported annual turnover of €640m in 2002.

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