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Australia: Fonterra Expanding Organic Milk Production


Australia: China Fuelling Interest in Organic Production


Australia: Sukin Owner Makes ASX Debut




Australia: Fonterra Expanding Organic Milk Production

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 said.

"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 farmers.

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 Beingmate.

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 term.

"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."

Source: 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 behalf.

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. More details are on the website

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."

Related Report:
Mergers, Acquisitions & Investments in Natural Personal Care Industry

Source: News Release














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