Author Topic: Bega stays confident about dairy formula trade, but Bellamy’s still in lockdown  (Read 1724 times)

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 Bega stays confident about dairy formula trade, but Bellamy’s still in lockdown


21 Dec 2016

Bega Cheese has told shareholders its market for organic milk-based formula is still strong despite a key customer, Bellamy's Australia, continuing to keep its shares suspended from trade while it talks with suppliers.

Bega executive chairman, Barry Irvin, said there continued to be strong consumer demand for infant formula in China and other Asian markets.

Its organic infant formula sub-category was also strong despite signs of short-term oversupply and price discounting in the “infant and growing up” dairy powder categories.

He said regulatory changes in China and the evolution of supply channels had led to market disruption in recent months, but the company had not changed its profit guidance expectations set in October.

He said regulatory changes in China and the evolution of supply channels had led to market disruption in recent months, but the company had not changed its profit guidance expectations set in October.

However, troubled Bellamy’s shares will stay suspended from trade on the Australian Securities Exchange (ASX) for another three weeks pending "negotiations with key supplier/ manufacturers".'

The organic baby food and formula maker told the ASX it wanted to clarify underlying demand for its products and the state of its finances.

more: http://www.farmonline.com.au/story/4370818/bega-positive-on-dairy-formula-trade-but-bellamys-still-in-lockdown/?cs=5373

Bega Cheese, a2 Milk reassure investors as Bellamy’s woes deepen: http://www.theaustralian.com.au/business/companies/bega-cheese-a2-milk-reassure-investors-as-bellamys-woes-deepen/news-story/7cc020c075a760721336cfc25cf16e2f

January 19 2017 - 9:55AM

Bega Cheese snaps up Vegemite as part of $460m deal

Bega Cheese has bought back the farm by broadening its reach in the food industry, snapping up Vegemite and other Kraft brands in a $460 million deal which takes it far from its roots as a cheese producer.

In a surprise move, the company said it is to buy the Kraft branded food products businesses in Australia which gives it control of a suite of household names spanning Vegemite to peanut butter, mayonnaise and Kraft processed cheese.

Bega said the acquisition will give it a strong presence in the domestic spreads business.

The link with Kraft began in 2009, when Bega began producing some of the US company's processed cheese products.

The revenue of the businesses being purchased run at $310 million a year with the gross profit, as measured by earnings before interest, tax, depreciation and amortisation running at $40-45 million in the first full year.

The deal is a good one for Bega shareholders, it said, since it will boost earnings a share from the first full year of operation.

The Australian cheese producer will borrow the funds needed to complete the acquisition, but it has signalled other initiatives, which may include asset sales to fund the deal.

Also included in the deal are other brands such as Bonox and ZoOsh, along with nut spreads and the like.

"Today is a historic day for Bega Cheese," the executive chairman, Mr Barry Irvin told analysts. "This is an exciting evolution for the company.

"This acquisition will be value accretive in its own right, strategically important and company making. These iconic brands alongside the Bega brand are strong building blocks to enable Bega Cheese to become a great consumer goods business.

"We are buying an iconic brand in Vegemite and some growth opportunities into the future."

"This acquisition will be value accretive in its own right, strategically important and company making. These iconic brands alongside the Bega brand are strong building blocks to enable Bega Cheese to become a great consumer goods business.

"We are buying an iconic brand in Vegemite and some growth opportunities into the future."

Along with the spreads businesses, Bega is acquiring salad dressings and other products such as parmesan cheese, but it does not include Kraft's Philadelphia cheese business.

Ownership of the Kraft brands transfers back to the US-controlled group at the end of the year, with transitional arrangements to be undertaken, Bega said.

http://www.smh.com.au/business/bega-snaps-up-vegemite-as-part-of-460m-deal-20170118-gtu7wk.html