Dairy foods specialist Beston Global Food Company (ASX: BFC) has ramped up mozzarella production to 500 tonnes a month of product at its debutante Jervois plant as it prepares to launch three Fancy Bites snack products into Woolworths supermarkets under its Edwards Crossing premium cheese brand.
The food company, which dropped off the All Ordinaries list on 19 March 2018, said the factory produced saleable product within a few days of its 14 February 2018 commissioning date.
“All of the Mozzarella produced in the start-up phase of production in February and March, amounting to some 160t, has been sold,” the company said in a market update today.
“The completion of the mozzarella line has highlighted the benefits of being able to offer a range of different cheese products to customers – both ‘hard’ cheese and ‘soft’ cheese – and to move milk supply between the company’s two plants at Murray Bridge and Jervois to achieve operating efficiencies and maximise plant utilisation on a daily basis.”
Beston reported the two plants were now processing 100 million litres of milk a year.
The company tipped it expected annualised throughput would grow to about 130-140 million litres within four to five months.
Twenty million litres of milk is sourced from Beston’s Mt Gambier farms, with another 80 million litres taken from contracted dairy farm operations.
By the end of the year, Beston is hoping to up its annual factory throughput to 160-180 million litres and is scouting new milk suppliers.
The company said it had recently received export accreditation for the Jervois mozzarella factory, allowing first exports for the facility’s dairy produce.
Fancy Bites chew
Headquartered in South Australia, Beston chose its home state to begin its Fancy Bites product roll out across the country, with the product to be available via Woolworths supermarkets.
The company said it recently completed development of the adult snack line it named Fancy Bites, with the three variants to be launched under Beston’s Edwards Crossing premium cheese brand.
Beston will supply the snacks to 700 Woolworths stores across Australia.
The Edwards Crossing branded cheese products are produced at Beston’s Murray Bridge factory and the brand has been one of the fastest growing cheese brands in Australia over the last two years, attracting 28 medals and trophies since its launch.
Beston released the brand after buying the factory from UDP in September 2015.
The A$72.63 million company had a notable A$28 million cash and no debt on 30 June 2017. Adelaide-based Beston then ran down its cash reserves to A$5.2 million by 31 December 2017, it revealed in its latest half-year report.
Beston blamed the cash depletion on investments in its mozzarella and hard-cheese plants, and buying up milk to fund its increased throughput.
The company grew its December half-year gross profit 426% to A$5.54 million in the December 2017 half-year, when compared to the December 2016 half, due to increased milk supply and cheese production volumes.
Beston’s half-year earnings before interest, tax, depreciation and amortisation were an improved A$3.13 million loss — a 51% better result than the December 2016 half-year’s loss.
The company’s directors include chairman Dr Roger Sexton, non-executive director Stephen Gerlach and independent directors Petrina Coventry, Jim Kouts, Ian McPhee and Catherine Cooper.
Mr McPhee bought 250,000 shares on-market for A$0.20 each on 21 March 2018, taking his stake to 1 million fully paid ordinary shares.
The company’s top 20 shareholders held 64.4% of the company in February 2018, with 14.5% resting with Kunteng, a Singaporean subsidiary of the China-based private company Dalian Hairunlai Group.
Australia Aulong Auniu Wang Food Holdings held 12.3%, IG Investment Management 9.9%, Allianz Asset Management 4.5% and First Boom Investments 4.5%.
Beston’s closing share price has trended down from the A$0.195 it opened last month with, on 3 April 2018.
In the past week, the share price has kicked back in an upwards direction after reaching a closing price low of A$0.155 last Thursday.
Beston’s top closing price of A$0.52 was achieved on 29 January 2016, with A$0.28 being the ceiling over the past 12 months.
The company’s shares closed today up 17.65% at A$0.20.