Beston Food serves up $127 million listing

Beston Global Foods Company (BGFC) has completed its IPO capital raising and will list on the Australian Securities Exchange with an initial market capitalisation of just over $127 million.

The Chairman of BGFC, Dr Roger Sexton AM said the IPO had been completed successfully despite a number of significant head winds, including the Greek financial crisis, the China stock market melt-down and increasingly negative sentiment about the  performance of the Australian economy.

Dr Sexton said the BGFC offering had found strong appeal among Asian institutional investors as well as retail investors in Australia. Strong support was also shown in the Broker Firm component of the Offer resulting in a scale back of the shares available to investors under the Broker Firm Offer.

“The core objective of BGFC in taking healthy eating to the world’s growing communities has resonated strongly in Asia, with the result that around 50 per cent of the investors in the IPO are from offshore," Dr Sexton said.

"Investors have recognised the quality of the assets and food products in the BGFC portfolio as well as the strength of the management team and the Board of Directors.

"The Board and management team, collectively, have been involved in managing various aspects of large food and beverage companies in the USA, Asia and Australia over a period of more than 20 years.  In addition to this broad range of industry skills, we have retained all the experienced operators in every one of the food manufacturing and processing businesses in which we have taken an ownership interest over the past three years.”

Dr Sexton said that while BGFC had established marketing and distribution operations to supply products throughout Asia and the Middle East, there was no doubt that rising consumerism in China was leading demand for clean, green, food-safe products from Australia.

It is estimated that more than 320 million people will shift into the middle class in China between now and 2030.  The rise of China’s middle class to an estimated 854 million people by 2030 will lift the consumption share of GDP from its current 36 per cent to around 50 per cent by 2030.

BGFC Chief Executive Officer, Sean Ebert, said the BGFC model was based on an integrated closed loop supply chain in which the company owns the raw materials, takes advantage of advanced knowledge and technology in the production process and controls the marketing and distribution of end products through company-owned subsidiaries in key global locations.

For example, BGFC earlier this year purchased the former UDP dairy sites at Murray Bridge and Jervois in South Australia, which have now been rebranded as Beston Pure Foods and will be relaunching with its product range in early September.

“Our investment will increase the production capacities of the two plants and introduce new products for distribution into China and the ASEAN region by BGFC subsidiaries based in Thailand, Vietnam, China and Brunei,” Mr Ebert said.

“Ownership and operational control of the UDP facilities also will enable us to deliver key elements of our business plan at a lower cost than if we had to contract with outside providers.

“In line with this strategy we are currently in the process of relocating the Australian Provincial Cheese manufacturing plant from Victoria to the Murray Bridge site in order to expand its production to meet current export demand for customers in Japan, Korea and Malaysia.”

Mr Ebert said that in conjunction with other companies in its portfolio of food and beverage investments, BGFC had created a range of natural, clean and green products, which capitalise on the intrinsic benefits of Australia as a premium food producer. 

He said new contracts had already been signed for products including a range of European cheeses and is currently in discussions with customers in both China and Asia on a range of dairy products, all of which are in high demand in Asia and which will be progressively introduced into production at Murray Bridge and Jervois over the next three years.

It is expected that BGFC will commence trading on the ASX on Friday 28 August, 2015.  Bell Potter was Lead Manager for the float and Morgans and Bell Direct, Co-Lead Managers. Minter Ellison was the Solicitor to the Offer.

ISSUED BY HUGHES PUBLIC RELATIONS: Please contact Mark Williams or Tim Hughes at
Hughes Public Relations on 08 8412 4100 or 0417 788 891