Emmi strengthens its Latin American business: Surlat and Quillayes to merge

24-Sep-2019 - Switzerland

Surlat, the existing Emmi company in Chile, is merging with competitor Quillayes to form Quillayes Surlat. The newly founded company will be the number four in the Chilean Dairy market. Emmi subsidiary Kaiku will hold a majority stake of 51.5 %. The acquisition is subject to approval by the local competition authorities.

Strengthening its international presence is a key pillar of Emmi’s strategy. Some of the desired growth is to be achieved in growth markets – such as in Latin America. Through its holding in Mexican company Mexideli and the recent increase in its stake in Brazilian company Laticínios Porto Alegre Indústria e Comércio S.A., Emmi already has notable positions in these markets. Emmi is also present in the Chilean market in the form of local company Surlat, through its majority stake in Spain’s Kaiku Group. Agreements have now been signed as of 29 August 2019 to merge Surlat and Quillayes to form the new company Quillayes Surlat. Kaiku will hold a majority stake of 51.5 % in Quillayes Surlat. As a result, Emmi, which holds 73.5 % of the shares in Kaiku, will have a 37.8 % stake in Quillayes Surlat.

A long-established, innovative brand with a stable market position

Quillayes produces cheese, yogurt, butter and cream in Victoria (southern Chile) and Calera de Tango (close to Santiago). It has developed a solid market position, especially in the cheese market, and particularly with fresh and soft cheese and speciality cheeses, but is also well established in other segments and in distributing imported branded goods. Quillayes is a long-established brand with high recognition, which is one reason why its name is used first in the new company name. Surlat’s key segments are UHT milk and other dairy products, particularly in the lactose-free area.

Number four in the Chilean dairy market

In 2018 Quillayes generates sales of some CLP 50,000 million (approx. CHF 70 million). Surlat recorded net sales of around CLP 70,000 million in 2018 (approx. CHF 100 million) and has reported growth in a challenging market environment over the past three years. The merger will make Quillayes Surlat the number four in the Chilean dairy market. The move will take Emmi’s sales in Chile to approx. CHF 170 million. “The merger strengthens Emmi’s presence in Chile, reinforces our involvement in Latin America and opens up new potential,” explains Emmi CEO Urs Riedener. The economic situation in Chile is stable in comparison with other Latin American countries: the government pursues business-friendly policies.

Completion of the transaction is subject to approval by the Chilean competition authorities. The parties have agreed not to disclose the details of the transaction.

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