Clover acquisition to work for Woolworths

© merlin7125 - Fotolia.com

The acquisition will see Clover entering the Ayrshire and organic milk markets, where it will manufacture and pack fresh milk and cream, in addition to other dairy products, for Woolworths at the acquired Nkunzi facility as well as its Clayville plant in Midrand, Gauteng.

"The Commission initially expressed concern over the impact of the acquisition on small farmers and employment when we first announced the acquisition. I am very pleased that through continued engagement we could address these issues satisfactorily and establish a win-win environment," says Clover CEO, Johann Vorster.

"Ayrshire's name in dairy has grown over the past two decades due to substantial and continued investment by Woolworths. Our view is that Ayrshire's strong brand is closely aligned with that of Clover's, as it is synonymous with quality dairy products.

"In addition to promoting the Ayrshire brand through continued high-quality dairy products, Clover will invest further in capital equipment and provide employees with a wider career scope within the group."

In terms of the Competition Commission's conditional approval, Clover undertakes not to retrench any employees because of the acquisition. In addition, Clover will invest in production capacity and facility upgrades, which will in part be driven by Woolworths' 2020 growth strategy.

Clover will take over existing Nkunzi supply agreements with producers on the same terms and conditions, or renegotiate supply agreements on an individual basis with producers.