On 4 February, Beingmate announced the final agreement
signed with Fonterra, to acquire 51%
of shares in Fonterra's Darnum plant. This is a move for Beingmate to make
foreign business layout to build its quality milk sources and further
strengthen its competitiveness.
On
4 February, Beingmate Baby & Child Food Co., Ltd. (Beingmate, stock code:
2570) announced the signing of its final agreement with Fonterra, to acquire
51% of its Darnum (Australia) plant for USD58.3 million (AUD82.0 million,
AUD1.00=USD0.7111 on 17 February, sourced on hexun.com), creating an
unincorporated JV to run the plant. Beingmate (Australia) PTY Ltd. has
been set up, although the agreement still needs the approval of the government
departments in both China and Australia.
This acquisition was initially established by the 2 sides in 2014.
Specifically, their partnership involved:
· Fonterra to acquire up to 20% of stake in
Beingmate
· Beingmate to distribute the Anmum range on an
exclusive basis
· Fonterra and Beingmate to build a JV to run
the Darnum plant
Darnum represents a total investment of USD213.2 million (AUD300 million) and
acts as Fonterra's global centre for nutritionals. In 2015, the 2 companies
finished testing of specially made infant formula in the plant.
In 2014, Beingmate refocused from infant formula to "baby & children's
food', rebranding from Beingmate Science and Technology Industry Trade Co.,
Ltd. to Beingmate Baby & Child Food Co., Ltd. In addition, it divested its
non-food business off and launched new products. However, its infant formula
business - 93.5% of its sales mix - continued to suffer. In this context it
began strategic cooperation with Fonterra. The overall macro-economic downturn,
slowdown in domestic demand, stocks clearance and subsequent price competition
and increasing imports of infant formula have all combined to threaten the
domestic formula businesses such as Beingmate.
The acquisition of Darnum gives it access to obtain Australian dairy
ingredients and infant formula in original packing, helping it internationalise
and improve its financial performance. "In the last 2 years, we have been
expanding at home and abroad, to get quality milk sources, improve our product
quality and enhance our R&D capability. All of this will show results in
the near future,' said Beingmate.
Notably, in January the company predicted its full-year 2015 figures, saying
that its net profit will rise by 45-60% YoY to USD15.2-16.8million
(RMB99.9-110.2 million). This is already a good start.
The Australia deal gives it the rights to half of Darnum's annual 50,000 tonnes
output. Currently Beingmate manufactures infant formula at its main two plants
of Anda (Heilongjiang Province) and Tangqi (Hangzhou City, Zhejiang Province)
and the much smaller Beihai site (Guangxi Zhuang Autonomous Region). Its formula
output rose to close to 60,000 tonnes in 2013 but has since dropped back
significantly. The impact of the Darnum volume on the company's domestic
manufacturing configuration remains to be seen.
Beingmate signs MOU with Fonterra, 27 August, 2015
Source:
Baidu.com
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Tag: Beingmate, Fonterra