Dairy Crest has acquired the remaining 50% stake in Promovita Ingredients from joint venture partner Fayrefield Foods for £6m.
Promovita was set-up as a 50:50 joint venture between Dairy Crest and Fayrefield in 2014. The JV develops and produces galacto-oligosaccharide (GOS), which is a prebiotic used in infant formula.
Dairy Crest believes that the complete ownership of Promovita will benefit its shareholders as it allows the dairy company to have sole control over the GOS business and to gain advantage of the benefits derived from this business.
Dairy Crest CEO Mark Allen said, 'This is a further important step in the evolution of our added-value ingredients business. We remain on track to begin commercial production of GOS in early 2016 and this acquisition gives us full control over the development of this exciting business.'
In addition to investing in GOS, Dairy Crest is investing £45m in manufacturing machinery to produce demineralised whey (DW) at the Davidstow site.
In October, Dairy Crest received approval from Competition Markets Authority (CMA) to go ahead with the £80m sale of its dairy operations to Muller UK and Ireland Group.