Beston’s new chief executive Jonathan Hicks says its world-class mozzarella factory is key to a big year for the SA company

BESTON Global Food Company’s new chief executive Jonathan Hicks thinks he has one of the best cheese factories in the world in SA, and it’s his mission to use that and other assets to propel the Adelaide company to a strong financial position.

Beston Global Food Company's master cheesemaker Paul Connolly with a wheel of romano cheese. Pic: Beston

BESTON Global Food Company’s new chief executive Jonathan Hicks thinks he has one of the best cheese factories in the world in South Australia, and it’s his mission to use that and other assets to propel the Adelaide company to a strong financial position.

Beston has had excellent top line growth during the first half of the financial year, boosting revenues by 136 per cent year on year. The company is forecasting $100 million in revenues for the full year, up from $47.9 million for the previous corresponding period.

But work still needs to be done getting the profits to match.

Mr Hicks, brings a strong CV to the job, with roles in cheesemaking going back to the mid-1990s in the UK, and more recently as a senior executive at Bega Cheese and Managing Director of Surface Tension, an agribusiness advisory firm in Australia.

And he’s also a cheesemaker himself.

Mr Hicks joined Beston this year, and has been on the front foot communicating his vision for the company, which hinges on driving the business units the company has operating control over, under a strategy of “volume, value and velocity”.

Beston’s operating ethos has evolved since it listed on the ASX in late 2015.

The company was originally marketed as an investor in areas where strong growth could be forecast - primarily putting funds into businesses selling Australian food to Asia.

While it has previously cast its net wide, Mr Hicks is intent on focusing on the two main businesses Beston has full control over - its dairy and meat businesses - and really making them sing.

Beston Global Foods chief executive Jonathan Hicks, March 2019. Supplied.

The company has other business units such as water, and seafood, however the owner’s sale of lobster company Ferguson Australia will soon see Beston cash out of that business.

Other investments have fared poorly, such as its 10 per cent stake in Neptune Bio-Innovations which the company wrote down to zero at the end of the past half year, booking an $11.6 million impairment.

Mr Hicks characterises Beston currently as “a start up company at phase two”.

He said the company had “come from a broad base in terms of the offering ... but when we take a step back and look at this organisation and our opportunities for growth, they’re largely geared around our dairy and meat divisions’’.

“The two divisions are very important to us because we own 100 per cent of the assets.

“We’ve got substantial capacity, we’ve got some extremely good assets, and I’m very comfortable with my background and my judgment - we’ve got one of the best mozzarella plants in the world.’’

Mr Hicks said he had seen, at last count, 32 mozzarella plants globally, and the company’s Jervois factory, commissioned in March last year after a $26.5 million investment, was “truly world class’’.

“We can meet the market in terms of consistent supply of high quality dairy products.’’

Mr Hicks says cheese companies play in a global market, with Australia a net exporter of cheese, but competition exists with imported products based on price.

Beston believes it can supply top quality product, but also look to “de-commoditise” its dairy offering through innovation and partnerships with customers.

“We can offer a unique sales point - there are many things we have access to which offer an end user a first-mover advantage in a very competitive market,’’ he said.

This could involve contract manufacturing a branded product for a third party or supplying large users of cheese with a particular bespoke product.

Mr Hicks said the company’s profile in the cheese sector was rising across Australia and internationally, and that would continue.

Packing of mozzarella at the Beston cheese factory.

On the meat front, the company’s wholly owned subsidiary, Provincial Food Group, has in place new contracts worth close to $10 million with three new customers for the supply of burgers and other “quick meal” or ready to heat products for both domestic and international consumption.

“We have some rapidly emerging capability and IP relating to what we do.’’

Mr Hicks said “tailored meat solutions”, whereby, once again, products could be developed specifically for an end user, would again serve to allow Beston to value-add beyond commodity meat prices.

And the sum could be greater than the parts.

“Our value proposition with the meat business is extraordinary. There is a significant synergy to the sale of premium, high end burgers, along with the sale of cheese slices.

“It’s obvious but there are no dairy companies in this region that can walk into a franchise burger chain and offer them this solution.

“That capability gives us access to the direct to end user space or a point of difference through our food services channels here in Australia.’’

On the financial front, the company recently told the ASX it would use existing debt facilities to invest in areas where it saw good opportunities for a short-term pay-back.

These included increasing its dairy herd size by 320 cows, bringing it to 3470, installing new equipment at Jervois to bring some lactoferrin operations in-house, buying new equipment for the meat business and buying and installing new cut pack and shred cheese equipment, which will save $1.6 million a year, as a result of a $6 million investment.

The company is also implementing various profit improvement and cost reduction initiatives, with a plan put in place by Executive Chairman Roger Sexton in August 2018, and are identifying and executing further savings to the $1 million already saved in annual costs out of the company.

Mr Hicks is a mix of innovative on the business front, and conservative on the financial front, with his mission ultimately to serve the company’s 3000-plus shareholders.