Freshways Dairy and Medina Dairy merge

By Rod Addy contact

- Last updated on GMT

The newly merged business will process about 500m litres of British Red Tractor farm assured milk
The newly merged business will process about 500m litres of British Red Tractor farm assured milk

Related tags: Dairy, Finance

Freshways Dairy and Medina Dairy have announced a merger to create a more sustainable, scaled up business called Medina Freshways Ltd.

Freshways, based in Acton, and Medina Dairy, based in Windsor, said they believed the new business would be in the best interests of their combined staff, customers and the British dairy farmers that supplied them. 

According to the announcement, the merger, which is subject to regulatory approval, would create the basis for a viable, long term, fresh liquid milk business. It would have the scale and agility to compete with the largest players in the UK dairy sector.

The new business claimed a combined turnover of £400m, propelling it into the top 10 UK dairy processors, ahead of County Milk Products, Glanbia Cheese, First Milk and Yeo Valley, according to the latest financial comparatives.

1,000 staff

The business said it would employ 1,000 staff and process about 500m litres of British Red Tractor farm assured milk. A new complementary board and management structure will be put in place to oversee the merger, continuing operations and strategic development of the combined business.

Medina Holdings, the holding company for Medina Dairy had declared a pre-tax loss of £12.3m in its results for the 52 weeks to 26 October 2019. It had been hit by the loss of a contract to supply Sainsbury's. In its results, Medina Dairy said it was 'in discussions with another significant dairy distributor with the intention of rationalising the distribution network'.

It stated that 'the milk market environment continued to be very challenging'. Referring to the lost Sainsbury's contract, it claimed: "The quoted cost necessary to secure the arrangement would have been unlikely to have achieved profitability."

COVID-19

Its latest results 'were significantly affected by the provision of £8.9m for bad debts as a result of customer trading difficulties exacerbated by the COVID-19 pandemic in 2020'.

Nijjar Group Holdings, holding company of the Freshways group recorded turnover of £203m in the year to December 2020 and Medina Holdings recorded turnover of £232.6m in their latest sets of accounts. 

Sheazad Hussain, who is currently chief executive of Medina Dairy and Bali Nijjar, who is currently managing director of the Freshways group of companies, have been appointed as joint managing directors.

“Throughout our discussions it has become increasingly apparent how complementary both businesses’ capabilities and cultures are,"​ Nijjar and Hussain said.

"As such, through merging we will be able to harness these synergies to create a leaner, more agile and fit for purpose business. A business that will benefit customers, consumers and suppliers and ultimately, we believe, will be well placed to grow and develop in a sustainable manner for the long term.” 

Related topics: Dairy, Business Leaders

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