South Australia’s largest dairy processor, Beston Global Food Company (BFC), says the “sudden and dramatic escalation in inflationary pressures” have caused the board and management team to rethink its strategy from “a growth ambition” to be a food and beverage manufacturer to “an intense focus on profitability from its value-add dairy and dairy nutraceuticals business”.
BFC said it will close and sell three businesses - Provincial Food Group, Aqua-Essence, and Beston Technology.
Provincial Food Group is the company’s meat and plant-based meats processing operations in Shepparton, Victoria. Aqua-Essence is a water bottling production plant, land, and water licences in Mt Gambier, South Australia.
BFC CEO Fabrizio Jorge said the decision reflected the company’s recognition that it needed to “play to its strengths” if it was going to manage the inflationary environment successfully.
BFC supplies 30 per cent of South Australia’s total milk production and contributes more than $100 million in milk payments to dairy farmers. BFC said as a standalone business, it is set to deliver sales of more than $170 million with a trading EBITDA of ~$5 million in FY23.
The announcement comes three weeks after it released a trading update with a downgraded EBITDA guidance. BFG said whey prices had dropped 25 per cent in May.
the company had a successful capital raise late last year and had won sizeable contracts in the last two years.
Jorge said the sales would allow the company to accelerate its profitability and cash flows. Proceeds will be used to pay down debt.
