Burra Foods sells out 79 per cent to Chinese company
Australian dairy ingredient processor, Burra Foods, has sold a 79 per cent stake in its business to Chinese dairy farming company Inner Mongolia Fuyuan Farming Company (Fuyuan).
Existing shareholders, including founder and Chief Executive Officer Grant Crothers, retain the remaining share of the business.
Burra Foods said it agreed to the restructure to help improve market access and to raise capital to fund the expansion of its dairy processing facility in Victoria.
“The new shareholder structure will provide Burra Foods with vastly improved access to new high value milk and nutritional powder markets, facilitating low risk growth up the value chain, and access to additional capital,” said CEO and managing Director of Burra Foods, Grant Crothers.
“We have always been about maximising value from the milk solids we collect and process and have taken a very cautious approach to China, appreciating the significant risks that come with the increasing opportunities available,” he said.
“There are only winners in this deal as the new structure enhances the future for our loyal milk supply partners, provides ongoing employment for our dedicated staff, while ensuring increased and stable supply to our existing customers whether they are located in Australia, Japan, China or other parts of the world,” he stated.
Burra said the restructure is not designed to impact business operations and the company is committed to honouring all customer supply agreements and continuing to supply milk to its partners.
We are nothing without our supply partners and customers and are now in an even stronger position to meet their current and future needs with a solid business model that improves access to markets, technology and capital,” Mr Crothers said.
“Over the 25 years of growing Burra Foods from a very modest base, we have worked hard to live by our values, one of which is ‘nobody is smarter than the market’ where we respond to the market’s needs.
“This injection of capital provides us the scope to meet the ongoing market demand for premium dairy based ingredient products, including nutritional milk powders, and move up the value chain while minimising the risks associated with penetrating volatile international markets with high value products.”
The takeover is subject to approval by the Foreign Investment Review Board.