Beston, which listed on the ASX in August last year, has a collection of minority stakes in premium food businesses selling premium milk, cheese, lobsters, tuna and beef and is preparing to expand a cheese processing facility at a dairy plant at Murray Bridge, about 70 kilometres south-east of Adelaide.
Chairman Roger Sexton, who is also chairman of financial services group IOOF, says the company has had many approaches from dairy farmers wanting to switch their supply to Beston after the slashing of farmers’ milk payments by Murray Goulburn.
Murray Goulburn, which listed a unit trust on the ASX in mid-2015 to raise $500 million, severely cut the farmgate price it pays its 2,600 suppliers in April citing weak global conditions. Chief executive Gary Helou has since departed and the company is now the subject of an ASIC investigation and has been roundly criticised for failing to recognise much earlier it was previously paying a unsustainably high milk price.
Chairman Roger Sexton, who is also chairman of financial services group IOOF, says the company has had many approaches from dairy farmers wanting to switch their supply to Beston after the slashing of farmers’ milk payments by Murray Goulburn.
Murray Goulburn, which listed a unit trust on the ASX in mid-2015 to raise $500 million, severely cut the farmgate price it pays its 2,600 suppliers in April citing weak global conditions. Chief executive Gary Helou has since departed and the company is now the subject of an ASIC investigation and has been roundly criticised for failing to recognise much earlier it was previously paying a unsustainably high milk price.
He describes it was a «positive blowback» from the drama at Murray Goulburn, which was quickly followed by New Zealand-based dairy giant Fonterra in also cutting payments hard.
«We’ve had a lot of approaches from dairy farmers wanting to work with us,» Dr Sexton said on Wednesday.
Beston last year acquired two dairy processing facilities at Murray Bridge and nearby Jervois after a company called United Dairy Power went into administration. It had been owned briefly by Hong Kong businessman William Hui, who paid about $70 million for the broader operations in Australia in early 2014.
Beston bought the two South Australian processing plants for $4.5 million in a firesale. In April of last year, Murray Goulburn bought the Caboolture mozzarella cheese brand and some specialist mozzarella cheese-making plant and equipment. Murray Goulburn dismantled the mozzarella equipment, pulling it from the SA operations and shifting it to Victoria.
«We’ve had a lot of approaches from dairy farmers wanting to work with us,» Dr Sexton said on Wednesday.
Beston last year acquired two dairy processing facilities at Murray Bridge and nearby Jervois after a company called United Dairy Power went into administration. It had been owned briefly by Hong Kong businessman William Hui, who paid about $70 million for the broader operations in Australia in early 2014.
Beston bought the two South Australian processing plants for $4.5 million in a firesale. In April of last year, Murray Goulburn bought the Caboolture mozzarella cheese brand and some specialist mozzarella cheese-making plant and equipment. Murray Goulburn dismantled the mozzarella equipment, pulling it from the SA operations and shifting it to Victoria.
Dr Sexton said Beston is rebuilding that part of the plant and is also expanding its premium cheese operations under the Beston Pure Dairies brand and another brand, Edwards Crossing. A mozzarella cheese will be produced under the Beston Pure brand.
Dr Sexton said expansion in premium milk and dairy products is a key plank of Beston’s strategy, and he believes that the premium milk brand B.-d. Farm Paris Creek can become a serious player on the national stage. Beston owns 26.5 per cent of Paris Creek and is set to move to 36 per cent later in 2016 under an option it can exercise.
It is sold in Coles and Woolworths and Aldi. South Australian Agriculture Minister Leon Bignell injected $2.5 million in funds into the Beston dairy facilities on Wednesday and said he didn’t think there would be any compromising of the state’s «clean and green» premium food and wine image if it eventually pursued an underground nuclear waste facility in the desert lands in the north of the state, as recommended by a nuclear Royal Commission.
Dr Sexton also has high hopes for a bottled water brand called AQUAessence which has a high PH level because its source is underground limestone caves near Mt Gambier. High alkaline levels are sought after in China in bottled water because of the supposed anti-oxidant properties. Beston owns 51 per cent and when the business was acquired two months ago it was producing 1.4 million litres annually. «We think we’ll double that and then triple it fairly quickly,» Dr Sexton says.
Dr Sexton said expansion in premium milk and dairy products is a key plank of Beston’s strategy, and he believes that the premium milk brand B.-d. Farm Paris Creek can become a serious player on the national stage. Beston owns 26.5 per cent of Paris Creek and is set to move to 36 per cent later in 2016 under an option it can exercise.
It is sold in Coles and Woolworths and Aldi. South Australian Agriculture Minister Leon Bignell injected $2.5 million in funds into the Beston dairy facilities on Wednesday and said he didn’t think there would be any compromising of the state’s «clean and green» premium food and wine image if it eventually pursued an underground nuclear waste facility in the desert lands in the north of the state, as recommended by a nuclear Royal Commission.
Dr Sexton also has high hopes for a bottled water brand called AQUAessence which has a high PH level because its source is underground limestone caves near Mt Gambier. High alkaline levels are sought after in China in bottled water because of the supposed anti-oxidant properties. Beston owns 51 per cent and when the business was acquired two months ago it was producing 1.4 million litres annually. «We think we’ll double that and then triple it fairly quickly,» Dr Sexton says.
Source: Financial Review