Campina Further Expands Ingredients Business - Joint Venture With Vitalus in Canada

Joint Venture With Vitalus Will Provide a Stepping Stone for Further
Expansion of Food & Nutrition Ingredients Business in North America

ZALTBOMMEL, The Netherlands, Aug. 10 /CNW/ - Campina, one of Europe's leading dairy companies, headquartered in the Netherlands, and Campina, one of Europe's leading dairy companies, and Vitalus, based
in Canada, have entered a Joint Venture (JV) in value added Food & Nutrition ingredients. The 50/50-JV will further strengthen the position of Campina's ingredients business in functional and nutritional ingredients in the North American market. By joining forces, Campina enhances the critical mass for further penetration in these markets with dairy based ingredients. The JV is expected to generate a turnover of EUR 10 million and will involve initially approximately 50 people. The JV will operate under the name DMV-Vitalus Ingredients N.V. and will be effective as of August 10, 2006.

Vitalus will bring into the JV its range of specific dairy based ingredients and US customer base, whereas DMV International will cover for sales, marketing and customer support throughout North America. The JV will
focus on expanding the business with a portfolio of dairy protein specialties such as whey protein concentrates for use in food products and in infant, and diet nutrition formulas. The JV will be owned 50/50 percent, emphasizing the commitment of both partners to build a strong position in the ingredients business. Management control of the JV will be with Campina.

"With this JV Campina will improve its position in the international ingredients business and strengthen its presence in the important North American dairy ingredients market. The market value is estimated at an
impressive EUR 4 billion and showing annual growth rates of 3-4 percent", said J.J.G.M. (Justin) Sanders, CEO of Campina BV. "The JV is fully in line with Campina's growth strategy and will form a solid basis to continue long-term investments in innovation, quality and service, needed to stay ahead. By the end of this year the major investment project 'Veghel Force' in DMV's production facilities in the Netherlands will deliver us a highly efficient whey processing plant and a range of unique whey based ingredients. Through this partnership, North American markets will have an even better access to this promising ingredients portfolio."

J. Hugh Wiebe, CEO of Vitalus stated: "Our goal has been to develop nutrifunctional ingredients derived from whey and milk based proteins which is our continued commitment to our customers to meet their needs. The JV will strengthen our dedication to customers and will expand our products to the world market. Vitalus' strategic plan will be enhanced through the JV and our growth potential will be increased. It is definitely a good fit."

The announcement of the JV with Vitalus is a third milestone in a row in the deployment of Campina's international growth strategy for ingredients. On June 1st 2006, Campina announced the acquisition of the Inovatech plant in Argentina that produces a range of ingredients for the food industry worldwide and is fully integrated within DMV International's business line Food Systems & Nutrition. In addition, Campina announced recently a JV between DMV International and Lactose New Zealand to join forces in pharma ingredients.

DMV International, part of Campina's Industrial Products Group, serves the food, nutrition and pharma industries worldwide and has its primary production locations in the Netherlands, Germany, Belgium, Argentina, and the USA. DMV International has in total 18 sales offices, supported by a global network of agents and distributors, and exports its products to almost 100 countries. Total turnover generated within the industrial ingredients business in 2005 was EUR 518 million and total number of employees was 873. Vitalus supplies "nutrifunctional" products to the industry; products that provide nutritional and/or functional benefits. Vitalus supplies a range of ingredients, whey and milk based ingredients, predominantly Whey Protein Concentrates (WPC's). Vitalus has a production facility and offices in Abbotsford/BC in Canada and a sales office in Bellingham/WA in the USA. Vitalus reported a total turnover of US$ 35 million in 2005 and the total number of employees is almost 40.

Campina has informed the employees and the Central Works Council of the JV.

Campina is an international co-operative company active in the development, production, sale and distribution of dairy and dairy-related consumer products and advanced ingredients for the food and pharmaceutical
industries. Campina has an annual turnover of around EUR 3.6 billion and some 6,800 employees. The company holds leading positions in the markets in which it operates, with consumer brands such as Campina, Landliebe and Mona. Campina's Industrial Products group operates on a global scale. This ingredients group, with the DMV International division, is a successful partner for the food and pharmaceutical industries, among others.

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