Australia’s Beston Global Food Co. is divesting its meat and plant-based business in order to focus on its dairy produce. The decision comes as a result of the sudden and dramatic escalation in inflationary pressures in Australia. By discontinuing and divesting Provincial Food Group (PFG), which includes its processing plant in Shepparton, Victoria, water bottling production assets, land and water licenses in Mt Gambier, South Australia, and the food-safety service Beston Technology, Beston Global Food Co. aims to concentrate all of its resources and efforts on its dairy and dairy nutrition business. This strategic move will allow the company to concentrate on its most profitable segment and better withstand the cost/price pressures impacting the industry.
Previously, Australia’s Beston Global Food Co. had revised its EBITDA guidance for the financial year 2023 due to inflationary pressures. However, the underlying performance of the business remains strong. To counter these pressures and volatile whey protein prices, the company is focusing on high returning, short pay-back capex projects. The company is optimistic about the future, predicting that its dairy business will generate over $170m in the financial year 2023 with a trading EBITDA of approximately $5m.
Beston Global Food Co. CEO Fabrizio Jorge expressed confidence in the decision, stating that the divestment reflects the company’s need to play to its strengths as a value-added dairy processing and nutrition business. Prior to this divestment, PFG manufactured meat and plant-based ‘meat’ products sold in retail and foodservice channels. It also supplied raw diced and minced meat to other food manufacturers.
Last year, Beston Global Food Co. considered a long-term supply agreement with KCG Corp. in Thailand. However, the agreement hit a hurdle in September. The proposed deal aimed to see Bangkok-based KCG take a 12% interest in BFC and distribute Beston Global Food Co.’s dairy, meat, and plant-based proteins in Thailand.
Overall, by divesting its meat and plant-based business, Australia’s Beston Global Food Co. aims to streamline its operations and focus on its dairy and dairy nutrition business, which it believes offers the greatest potential for profitability and growth.
