Domino Printing Sciences plc (“Domino”) has agreed to join with NewMarket Impressions LLC (“NMI”), a company controlled by The Yucaipa Companies, LLC, to form a new company to develop and deploy proprietary food safety and traceability technologies for the U.S. egg industry, with plans to expand globally. Domino is subscribing US$ 50 million in cash from its own resources for a 15 per cent equity share in the new company. Domino will be the sole supplier of both laser and ink jet coding equipment and fluids and aftermarket services to the business. Additionally, Domino intends to grow its existing global egg marking and coding services through this business opportunity and offer its current and future customers access to NMI’s groundbreaking proprietary egg safety and traceability technology.
In excess of six billion dozen eggs are produced in the U.S. each year. Last year in the U.S., more than 500 million eggs were recalled due to salmonella enteritidis disease (SE), causing 3,578 illnesses as reported by the Center of Disease Control and Prevention. Recent U.S. food safety legislation imposes new requirements of U.S. egg producers to strengthen salmonella prevention efforts. NMI has developed a comprehensive, real time end-to-end solution that will aid in SE prevention and its proliferation during the production, storage and transportation of shell eggs. Additionally, NMI developed a proprietary marking and coding system that marks certified fresh dates and trace codes onto the shells of individual eggs, thereby enabling every egg to be identified and traced, from harvest to table and back, through its supply chain. The NMI system can integrate with all purchase order systems and can identify shell egg product in real time at and during any point in its production, storage, transportation and consumption cycle.
Domino will provide all manufacturing services, hardware and maintenance for the new business. Domino expects the income from the trading activity with the new company to be earnings enhancing from 2012 with the potential for significant additional value from the equity shareholding in the medium term. NMI is transferring to the new company all of its knowledge, proprietary software and patents relevant to the U.S. egg industry.
Nigel Bond, Group Managing Director of Domino, commented:
"The simple “Best Before Date” is no longer an adequate protection, today full traceability of products from source to point of consumption are increasingly required. In partnering with NMI I believe Domino has a unique opportunity to deliver full compliance systems and as a result to increase significantly our market share of laser and ink jet coders. By taking an ownership stake in the new company we will be full partners with NMI in the development and deployment of systems globally. Our first priority will be the egg industry in the USA. We are excited by the opportunity and believe that over time, the returns from this investment will be significant."
Ron Burkle, Managing Partner of The Yucaipa Companies, commented:
“We are very pleased to welcome Domino into this compelling partnership. By combining NMI’s egg safety expertise with Domino’s market leading manufacturing and servicing capabilities, we will be able to provide the egg industry with a comprehensive safety system that will benefit all facets of the industry.”
Mitchell Chait, President of NMI, commented:
“NMI is delighted to be partnering with Domino in this hugely exciting business venture. We chose Domino as our partner because of their expertise in the egg coding market globally, their product range to meet the demands of this sector, and their superior competence in field support and installation capability. We anticipate large growth in the necessity to improve food and traceability around the world in the years ahead. This partnership offers food producers the highest quality and most cost effective system and support to comply with these requirements worldwide.”
Posted on Monday 4th July 2011