Bega Cheese has announced a joint project with vitamin and supplements manufacturer Blackmores to make nutritional foods through Bega’s Tatura Milk subsidiary, pushing up the share prices of both partners.
The joint, equal share project was discussed at the annual meetings of both companies, held in October.
Blackmores recorded an after-tax profit of $46million on group sales of $471million in the 2014-15 year and is being hailed as an Australian success story.
The company recently announced large bonuses in profit shares for its staff.
Speaking about the deal, Blackmores chief executive Christine Holgate said they were aware there was significant demand for infant formula.
‘‘We’re developing the range of Blackmores and Tatura products to ensure we have an offering that meets the highest quality standards, with premium ingredients,” Ms Holgate said.
“We believe that, with the combination of Blackmores and Bega, we’re uniquely positioned to support those women unable to breastfeed.’’
Ms Holgate said the market focus was not just Asia.
‘‘I believe the combination of Bega and Blackmores is very powerful,’’ she said.
Bega managing director Barry Irvin said the two businesses had similar aspirations and saw opportunities in nutritional products.
Tatura Milk makes infant formulas as well as skim milk and whole milk powders and milk protein concentrate.
While Bega’s revenue increased during the past financial year to $1.1billion, it was hit by a slump in commodity prices and resulted in an after-tax profit of $12million.
Mr Irvin told shareholders the company’s decision to hold farm gate prices in the face of declining commodity prices affected the bottom line result.
He said the company’s milk supply and growth program resulted in supplier participants lifting milk production by 20 per cent in three years.
Bega chief executive officer Aiden Coleman said the company would be expanding Tatura’s production of bio-nutritional products, including Lactoferrin.
Lactoferrin, found in high levels in colostrum, is used for treating stomach and intestinal ulcers, diarrhoea, and hepatitis C. It is also used as an antioxidant and to protect against bacterial and viral infections.
At the annual meeting, Toolamba farmer Rick Cross and Ardmona farmer Jeff Odgers were re-elected to the board.