On a quest to become Australia’s premier producer of organic milk products, Australian Dairy Nutritionals (ASX: AHF) has continued its advancement having now relocated their entire plant to a new 10 acre facility in Camperdown and attaining Customs clearance.
With the new facility designed to have multiple segregated milk silos, AHF is seeking to take advantage of demand from Asia for Australian dairy products and will have a strong focus on organic varieties of milk powder. At present, Australia produces 9 billion litres of milk annually, but only 60 million litres are organic.
“We now have firm attention on the next phase of the project, which includes finalising site planning at the Camperdown Dairy Park and building design,” said CEO, Peter Skene.
The transition for AHF, previously named Aust Dairy Farms Group, has been a long-term project which seeks to capitalise on price premiums for organic products where milk can command as much as a 42% premium. To achieve organic status, however, the standard conversion time for a conventional farm is 3 years.
The transition for AHF has been well supported by investors with the Company in June successfully raising $12 million in capital from institutional investors to advance the transition.
Currently with 5 dairy farms containing more than 2000 milk-producing cows, AHF produces 17 million litres of milk annually, but that figure is forecast to grow to 32MLpa by 2020 following the completion of their Stage 2 Formula Plant at an estimated cost of $45 million.
Support from investors has been backed up by the Company’s financial performance having reported FY19 EBITDA $1M over the previous year to -$1.7M as the Company continues trending towards capitalising on global demand for organic infant formula which is expected to reach US $7.75 billion by 2023.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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