Another major Australian milk supplier gets snapped up

Posted by AFN Staff Writers on 5th February 2014
Another major Australian milk supplier gets snapped up

The sale of privately-owned dairy giant United Dairy Power to Hong Kong businessman William Hui is locked in, according to Stock & Land.

It was reportedly sold for around $70 million. The paper reports Hui is the chairman and major shareholder of Swing Media Technology.

United Dairy Power processes milk, butter and cheese and operates from South Australia and Victoria. Owner Tony Esposito has reportedly been seeking a buyer for two years.

United Dairy Power history

Founded in 1999, United Dairy Power’s core business is the supply of milk and dairy ingredients to the Australian domestic market. However, as the business grew, it expanded to include a number of other business units ranging from logistics and transportation solutions to the manufacture and distribution of related dairy products. The Company’s main milk receival site is located at Poowong, 100 km east of Melbourne.

United Dairy Power owns Caboolture Cheese, which produces a range of pizza cheese and dairy products included shredded Mozzarella, diced pizza cheese, Cheddar, Romano and Pepato. Caboolture products are available across Australia from food wholesalers and distributors, including Bidvest Foodservice, Conga Foods, Countrywide, NAFDA and PFD Foodservices. The Company also exports its hard cheese range to Europe, and its soft cheese range to Japan.

As well as the Caboolture Cheese brand, the Company’s United Dairy Products business unit also manufactures a selection of hard and soft cheeses and other dairy products at its facilities in South Australia, including mild cheddar cheese, vintage cheddar cheese, butter and whey powder.

In June 2006, United Dairy Power announced that it would manage its own logistics with the creation of a new transport company called UDT Logistics.

The initial primary role for UDP had been as an aggregator of milk suppliers and offer competitive pricing in what was originally perceived to be a less-than-competitive milk supply market. The entrepeneurial Tony Esposito saw a gap to build up a significant stake in the milk supply market at a time when farmers needed better returns. The nadir in milk prices came when Coles started marketing substantial price discounts for milk.

In recent times, market conditions have rapidly evolved driven by the strength of dairy consumption growth in Asian markets. The time for a strategic sale of the United Dairy group to an international buyer was self-evident.