Mataura Valley Milk (MVM), which has a plant at McNab on the outskirts of Gore, is majority-owned by The a2 Milk Company alongside minority partner China Animal Husbandry Group.
Announcing its full-year results to the NZX yesterday, a2 Milk said it was divesting its 75% stake for about $100 million, while it expected to recognise a loss on sale of about $130m.
MVM was an advanced nutritional powder-drying facility that continued to have significant potential “but is no longer the optimal asset and pathway to achieve our strategic objectives”, it said.
The company appreciated the commitment MVM farmer suppliers, its team members, the local Gore community and China Animal Husbandry Group had made to develop the facility from a greenfield site in 2016 to what it was today, and it would remain a significant customer of MVM, it said.
Part of the acquisition agreement included a supply arrangement with The a2 Milk Company whereby the MVM site would continue processing A1 protein-free milk to produce A1 protein-free milk powder. Milk supply agreements with current farmer suppliers remained unchanged, a statement from Open Country said.
The a2 Milk Company, which reported net profit after tax rose 21.1% to $202.9m, also announced it had acquired Yashili New Zealand, a nutritional manufacturing facility in Pokeno, where it intended to spend about $100m in a multi-year capital investment programme.
At MVM, the FY25 year was characterised by higher GDT market pricing plus higher milk volumes processed through the site. Revenue at MVM of $144.7m was $43.3m higher than the previous year with ebitda losses improving to $17.4m, from $20.9m.
Mataura Valley Milk’s $240m plant was officially opened in 2018 with China Animal Husbandry Group then its major shareholder.
In 2020, it said it needed additional funding to continue operating, having initiated a search for a strategic shareholder to invest the previous year, and in 2021, it was confirmed a2 Milk would take a 75% stake of the company for a total of $268.5m.
In a statement, Open Country chief executive Mark de Lautour said the acquisition would give the company the ability to commit further to the Southland and South Otago regions. It already has a plant at Awarua, near Bluff.
“The deep South is an important region for Open Country and is an area we have previously announced as targeted for significant capital investment.
“This site is a strategic investment for Open Country given its advanced, high-tech design. Its capabilities give us the opportunity to produce a different array of higher-value products that will complement our current Awarua site product range,” he said.
There would be an opportunity for new farmers to add to the existing supply group. On August 26, he, Open Country’s board chairman Laurie Margrain and a2 Milk chief executive David Bortolussi would meet MVM staff and current farmer suppliers, Mr de Lautour said.
sally.rae@odt.co.nz
