After expanding their New Zealand manufacturing facility in March, Keytone Dairy (ASX: KTD) has reported record orders for their milk powder products from major Chinese client Nouriz.
The orders for $1.39 million is the single largest order placed by Nouriz with Keytone Dairy where Chinese consumers are still strongly demand for New Zealand dairy products unwavered through COVID-19.
“These significant follow-on orders from strategic clients of the business are increasing in both frequency and size,” said Keytone Dairy CEO, Danny Rotman.
“With the New Zealand second manufacturing facility online, Keytone is well equipped to service these growing orders from Nouriz and other key strategic clients of the business and will continue to work closely with these clients, growing the product offering and volumes.”
Opened in March, Keytone’s second manufacturing facility enables the Company to triple its production in any single shift and was commissioned to deal with the increase in milk powder demand which Keytone reported as four times greater than before COVID-19.
As an essential food production service, Keytone was able to maintain their operations open through New Zealand’s four-week total shutdown which has the dairy manufacturer well positioned to expand it’s export customers immediately.
To facilitate increases in its production capabilities and overall demand for dairy products, Keytone Dairy has undertaken a series of capital raises over the past month, raising $12.5m via private placements and $359k from a share purchase plan in May, both at offer prices of $0.31 per share.
Funds raised are primarily to be spent on working capital and marketing, whilst $4m is expected to be held for potential acquisition targets on top of the $4.3m cash balance reported as of 31 March 2020.
In that same quarter, Keytone Dairy reported sales of $8.3m but a net operating loss of $2.1m.
Shares in KTD were encouraged by the record orders to open at $0.30, a rise of 10% on the previous $0.275 close.
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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