German dairy heavyweight DMK is to sell an ice-cream facility in its home market to the owner of discount retailer Lidl.

DMK said the move was part of plans to “optimise its production network in the ice cream sector”.

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The cooperative said selling the Waldfeucht-Haaren production site in North Rhine-Westphalia, fits in with a plan to “streamline” its ice cream manufacturing base.

The plant is being sold to Schwarz Group, which owns and operates retailers Lidl and Kaufland, for an undisclosed sum.

Schwarz Produktion will take over the running of the Waldfeucht-Haaren site for its own ice cream manufacturing and will retain its approximately 200 employees. The transfer is planned for the beginning of 2021.

Explaining the decision to sell, Ingo Müller, CEO of the DMK Group, said: “The sale of the Waldfeucht-Haaren site is enabling us to concentrate our ice cream production in two locations. That creates further synergies.

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“We are continuing to build the DMK of the future. Germany’s biggest dairy cooperative, with brands such as Milram, Humana, Uniekaas and Alete, and one of the biggest suppliers to the German food retail industry, should continue to develop into a strongly market and consumer-oriented company. And to position ourselves for this in the best possible way, one thing we need to do is to further optimise our own production network.” 

DMK Group plans to focus its ice cream production on the Everswinkel and Prenzlau sites. It wants to increase production capacity at the existing site in Everswinkel from the current approximately 65m litres of ice cream to around 100m litres in the future.  

Germany’s largest dairy cooperative has around 7,700 employees at more than 20 locations in Germany, the Netherlands and elsewhere. Its product portfolio ranges from cheese, dairy products and ingredients to baby food, ice cream and health products.

DMK’s ice-cream business includes the manufacturing of products under licence. Since the start of the year, the company has added to its roster of licence partners.

“We want to build on our positive momentum in the ice cream sector from the previous year. In 2020, DMK will therefore continue to focus on consistently developing and expanding a profitable brand business – one which already accounts for 15% of its total sales. The aim is to also optimise processes and significantly increase distribution,” Marcus-Dominic Hauck, the COO of DMK’s ice-cream business, said earlier this month.