“Commodity prices have improved, albeit on reduced volumes and the sustainability of the recovery is yet to be established,” Bega chairman Barry Irvin told shareholders at the company’s annual general meeting at Kalaru in New South Wales.
Mr Irvin said Bega (BGA) expects increased price competition and price pressure as a result of lower farmgate milk prices from competing regions such as New Zealand.
While global market volatility affected Bega’s business last year, demand for quality, competitive, sustainably-produced dairy products was expected to continue to grow.
Bega chief executive Aidan Coleman said 60 per cent of Bega’s output was in consumer or food service pack formats.
Bega’s objective was to expand this further by 2020.
“At the same time, we will continue to seek ways to better utilise our dairy component streams that do not currently find their way into consumer packaged goods, in order to decrease our exposure to commodity cycles,” Mr Coleman said.
Mr Coleman said Bega was seeking to develop a new business platform: bionutrients.
Bionutrients include such products as milk protein hydrolysates, nutritional proteins, lactoferrin-based ingredients and specialised milk protein extracts.
Non-dairy bionutrients include plant extracts and marine bionutrients.
“The initial foundation of our bionutrient platform will be lactoferrin,” Mr Coleman said.
“The company is one of the world’s largest producers of lactoferrin, and from that base we intend to expand the capacity at Tatura Milk with ongoing research and development in value-added derivatives.”
Mr Coleman said Bega would also invest in new capacity in micronutrient extraction at its Bega facility, utilising the whey stream available there from cheese manufacturing.
Shares in Bega were 2.00 cents higher at $5.07 at 10.55am (AEDT).
Source: The Australian
