NEW ZEALAND – Westland Milk has acquired 60% of shares worth US$19 million from Hong Kong-listed infant formula business Ausnutria according to a stock exchange filing with the Asian bourse.
According to a filing from Ausnutria, Westland Milk, owned since 2019 by China’s largest dairy company, Inner Mongolia Yili Industrial Group (Yili), will now become the sole proprietor of the Pure Nutrition venture in New Zealand.
It highlighted that Pure Nutrition was set up to produce baby milk powder, follow-up formula and nutrition products for children and adults, with Westland providing the ingredients.
The filing added that products from Pure Nutrition, manufactured at a site in Rolleston, New Zealand, were destined for Australia and the Netherlands, as well as the PRC.
Meanwhile, Ausnutria NZ intended to principally sell the finished products to the People’s Republic of China (PRC).
Previously business Ausnutria formed a joint venture with the New Zealand dairy cooperative Westland Milk Products that aimed to see the two companies manufacture dairy-based powder products.
According to Ausnutria, the venture used land adjacent to a Westland site to produce lines including infant formula milk powder, follow-up formula and other nutrition products for kids and adults.
The venture involved Westland providing dairy powders to the plant, which Ausnutria saw as a way of building its presence in China’s infant formula market.
Ausnutria added that the joint venture was believed to be an important step for the group to further develop and diversify its milk source and hence enhance its capabilities in the production of infant formula to cater for the anticipated continued growth in [the] sale of an infant formula of the group in the PRC, as well as overseas countries.
“In addition, the board believes that the group can also leverage Westland’s expertise and resources through the establishment of the joint venture in New Zealand,” Ausnutria noted.
According to the business plan, the first phase of the plant is equipped with an annual capacity of 15,000 tons.
However, recently the business has been struggling due to operational challenges and adverse market conditions faced by Pure Nutrition causing it to make losses.
“Based on the above, the directors are of the view that the disposal would enable the group to focus its capital and management resources on the further development of the group’s existing business,” Ausnutria noted.
In 2022, Pure Nutrition booked revenue of US$210,420 but posted a net loss after tax of US$6.2 million, according to the company’s filing. It had assets amounting to US$18.7 million and liabilities of US$27.9 million as of 31 March 2023.
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