Fonterra Expanding Organic
The dairy co-operative Fonterra is seeking organic accreditation for its
Darnum factory in south-east Victoria, to produce baby milk formula for
the Bellamy's Organic brand.
Fonterra and Bellamy's have done a five-year, multi-million dollar deal,
that will see product produced at the Darnum factory, in west Gippsland.
Fonterra managing director for Oceania, Judith Swales, said the organic
accreditation should come through "very shortly."
"Darnum is a state-of the art, leading nutritional plant," Ms Swales
"Coupled with Bellamy's, one of the fastest growing infant formula
companies with strong brand recognition and expertise in the organic
supply change, this is a fantastic move forward for Darnum, for the
people who work there and for the farmers in the area."
Bellamy's has a longstanding deal with Tatura Milk Industries in
Victoria, to process its product. The deal with Fonterra is to process
additional milk power into new product.
Bellamy's will supply the organic ingredients to the factory in
Gippsland, meaning that no extra supply would be sought from Gippsland
The announcement of the partnership with Bellamy's comes as Fonterra
reaches the final stages of another baby food deal, this time with
Chinese company Beingmate. Fonterra has bought a 19 percent share of
Beingmate, and has sold a majority share of its factory at Darnum to
Ms Swales said the two separate agreements were both good news for the
Darnum facility. "We're filling the factory up," she said. "So
all-in-all the increased volume is good news for the factory and
everybody in the area.
"Beingmate is a joint venture, they will have access to just over 50
percent of the supply coming out of the factory. It (the deal with
Bellamy's) doesn't impact on the Beingmate joint venture.
"This is really about us filling up our half of the facility with a long
term strategic partnership with a market leader that's innovative and
growing very quickly."
Ms Swales said the deal could affect jobs at the facility in the long
"We've been doing some right-sizing in that facility over the last
couple of years looking at more efficient processes and ways of running
the business," she said.
"It could be that we bring other functions down to Darnum, which may
well mean that we bring on other people."
Bellamy's Organic baby formula is one brand that has been selling out on
some Australian supermarket shelves recently. Ms Swales said the supply
issues would not be resolved immediately. "The recent issues around
supply, we can't respond to them quickly. It does take time," she said.
"This is some of the more sensitive product that anybody will sell so it
has to be safe and obviously that means a supply chain that you're very,
very confident about. This will take time to come into affect but it is
positive for Bellamy's and for Fonterra."
ABC Premium News
Australia: China Fuelling Interest in Organic Production
Organic farming in Australia is primed for
a boom as beef and dairy producers clamour to take advantage of growing
export opportunities driven by China's emerging middle class.
Leading certification agencies are reporting surging interest from
farmers seeking to convert operations to organic. The National
Association for Sustainable Agriculture Australia reported a six-fold
increase in inquiries this year.
The agency is helping three organic dairy producers and processors
become certified to export to China, where demand for Australian-made
infant formula has seen prices escalate and fuelled a
multi-million-dollar grey market.
Australian Certified Organic, the largest certification agency in the
country, has 746,000 hectares of farmland in the process of conversion -
40 percent more than a year ago. Association general manager Ben Copeman
said existing overseas demand for Australia's organic produce, mainly
from the US, Europe and Southeast Asia, was outstripping supply by more
than 40 percent.
"You overlay China on top of that and we're in for a seriously big
boom," he said. "I'm talking 10 to 15 years of pretty good returns for
organic producers." A history of deadly food contamination scandals and
cover-ups had left Chinese people distrustful of their own food
regulators, Mr Copeman said.
"On top of that you've got this absolute love affair the Chinese have
with Australia's clean, green, safe image and if you take
the organic food standards, where every single product is audited every
year, organic by nature is even cleaner and greener and safer." Despite
Australia possessing about half of the world's organic certified farming
land, organic production comprised just 1.25 per cent of the country's
agricultural output of $45.8 billion (USD 33.4 billion) last year.
The industry, however, is growing by 15 percent a year, with exports of
organic products more than doubling from 2012 to last year, to $350
million (USD 256 million).
Bellamy's Australia recently admitted that it was struggling to keep up
with unprecedented demand for its organic formula as stock was being
stripped from Australian shops to be sold online in China. While
Bellamy's "Australian-made" and "organic" status- has resonated with
Chinese parents, the company has been forced to source the bulk of milk
used to make its formula from overseas, largely New Zealand and Europe,
due to the lack of organic dairy herds in Australia.
Arcadian Organic and Natural Meat Company, based in Toowoomba, has been
exporting beef to China since early last year, supplying a home-delivery
service business with a wealthy clientele.
The experienced exporter is currently in negotiations with several
high-end retailers, but chief executive Alister Ferguson said the
process was complicated by the fact that China did not automatically
accept Australian certified organic standards. As a result, the company
has been required to go through the process of having every farm, plant,
product and customer individually certified by a Chinese certification
agency at significant cost.
"I can absolutely see growth of our business in China but it's one of
the hardest markets to enter," Mr Ferguson said.
"I think the free-trade agreement will help by getting the two countries
working together ... but equivalency - whereby China would accept our
robust certification standards - would be the ultimate goal." Both the
association and Australian Certified Organic have recently struck deals
with Chinese agencies to enable them to audit organic producers on their
Organic Monitor is hosting a workshop on export opportunities in the
global market for organic & eco-labelled foods at the Sustainable Foods
Summit (20-22 Jan, San Francisco). The latest market data
on the global market will be presented, whilst the business openings for
exporters will be highlighted.
details are on the
Source: The Australian
Australia: Sukin Owner Makes ASX Debut
BMX Limited, owner of the natural
cosmetics brand Sukin and other brands, has been listed on the
Australian Securities Exchange.
The Melbourne-based company owns, produces and distributes skin and hair
care brands such as Sukin, Derma Skin, Renew Skincare, Uspa and Edward
Beale. It also manufactured products for third parties.
In an initial public offering that raised $39.3 million (USD 28.7
million), BWX commenced trading on the ASX, with its shares opening at
$2.12 (USD 1.55), a 41% premium on the initial share price offering of
$1.50 (USD 1.09).
By the close of trade on Wednesday, BWX shares were trading at $2.26 (USD
1.65) a share, a 51% premium of the company's initial price. This gives
the company a market capitalisation of $205 million (USD 150 million).
BWX recorded pro forma revenue of $45 million (USD 33 million) in the
2015 financial year and has forecast revenue growth of $50 million (USD
36 million) in the 2016 financial year, an increase of 11.2%.
The growth is being driven by the popularity of its key brands,
including Sukin, with pharmacy sales for that product growing by 40% in
the 12 months to August 2015. According to BWX, this places Sukin in the
top five skincare brands sold in Australian pharmacies.
BWX chief executive John Humble said in the same statement the natural
segment of the Australian skin care market is expanding rapidly. "We are
a growing and profitable Australian skin care company," Mr Humble said.
"BWX is a company in control of its own destiny owning the number one
pharmacy 'natural' skin care brand in Australia while controlling
manufacturing, packaging, marketing and its distribution network."
Mergers, Acquisitions & Investments
Personal Care Industry