Ownership of FrieslandCampina Domo’s pharmaceutical lactose business will be transferred to DMV-Fonterra Excipients, the 50/50 JV set up by Domo owner Royal FrieslandCampina and partner Fonterra.
The transaction, valued at some €52.5m ($75.7m), consolidates the respective parents’ pharmaceutical-grade lactose operations under the DMV banner in a move that firm believes will help it meet drug industry demand for tablet and inhalation excipients.
DMV spokesperson Maaike Freriks told in-PharmaTechnologist that the deal, due to come into effect on March 1, is the logical step following the merger of Friesland and Campina in late 2008.
“This combination will improve the critical mass of the company and increase our knowledge base that will allow for future investments in order to better serve customer needs.”
Freriks added however that: “DMV-Fonterra Excipients and Royal FrieslandCampina Domo-Pharma understand the importance of continuity and long term relationships for its global pharmaceutical customer base. Therefore the two businesses will continue to serve the market separately.”
Zwolle-headquartered Domo’s core pharmaceutical technologies include: Lactochem, for wet granulation; Lactopress, for tablet production; and the dry powder inhalation excipient Lactohale.
Domo also has a number of production facilities and research and development operations across the Netherlands as well as an extensive network of sales offices and distribution partners.
Following completion of the agreement, Domo will continue to operate its infant food grade lactose business under the Royal FrieslandCampina banner.
DMV predicted that the deal will create an organisation with turnover of some €120m which, if accurate, would position the firm as the leading global supplier of lactose to the pharmaceutical excipient industry.
This confidence is partly built on FrieslandCampina and Fonterra’s dominance of the global milk industry. The organisations, which are both co-operative groups of dairy farmers, generate revenues of around $10bn and supply of billions of kilo of milk in hundreds of countries each year.
This should provide the combined DMV-Domo excipients enterprise with a robust and stable supply chain that is capable of responding to both changes in demand and local sourcing issues that may emerge.