RENNES, France (Reuters) - French dairy cooperative Sodiaal said on Wednesday it was in talks to purchase part of an infant milk formula plant in northwest France from Chinese maker Synutra.
Sodiaal, the world’s fifth largest milk cooperative, became the leading supplier to Synutra after it signed an agreement in 2012 to provide the baby formula factory in Carhaix with 288 million litres of milk a year.
Sodiaal’s launched its deliveries to the plant in 2016 but a year ago reduced the volume supplied by about a half after Synutra failed to pay some bills due to poor sales for its French products in China, the Le Monde newspaper reported.
Sodiaal is negotiating taking over most of the baby milk production activities while Synutra would keep the packaging part, Le Monde said.
“This potential acquisition would enable (Sodiaal) to speed up its development on the growing baby milk market in China and other global markets,” Sodiaal said in a statement.
The Carhaix plant, employs nearly 350 people and has a production capacity of 120,000 tonnes of milk powder per year.
Sodiaal buys 4.7 billion litres of milk annually to make its products that include baby formula, cheese, yoghurt and butter.
Reporting by Pierre-Henri Allain; writing by Sybille de La Hamaide; editing by Richard Lough