Beston shares jump as export contract, new investor announced

Beston Global Food Company has announced two major deals with Asian partners, sending its shares higher.

Beston Global Food Company shares are up more than 20 per cent after the dairy and meat company announced major deals as well as a new cornerstone investor.

The South Australian food producer said it had secured export contracts to Japan which would account for about 20 per cent of its mozzarella production.

It also said it had signed a memorandum of understanding with Thailand’s KCG Corporation, under which the Thai company would take up shares equivalent to 12 per cent of the company at a significant premium to the current share price.

The two companies would also establish a long-term supply agreement for dairy, meat and alternative meat products.

The issue of 103 million new shares in Beston, worth $10m, would be made at 9.65c per share, compared with the previous closing price of 5.7c.

Beston shares were trading 22 per cent higher at 7c on Thursday.

Beston told the ASX on Thursday that KCG was the leading importer of dairy products into Thailand, and owned the Allowrie and Imperial brands, supplying most of the major supermarket chains including Big C, 7-Eleven, Tesco, Makro and Foodland.

READ MORE:IFM launches climate transition fund

“Under the MOU, KCG will become the official representative of and exclusive distributor of Beston products in Thailand, enabling Beston access to additional ASEAN markets with its products,’’ Beston said in a statement.

“Thailand imports more than 10,000MT of manufactured dairy products each year from all over the world and has also been increasing its imports of dairy nutraceuticals in recent years (including lactoferrin).’’

Beston chief executive Fabrizio Jorge said the two deals placed the company on a firm footing in Asia.

“These developments reflect the great progress we are making in the execution of our long-term business plan,” Mr Jorge said.

“Producing and delivering premium products to premium markets is a long-haul journey and our goal has always been to establish long-term, sustainable returns for our shareholders through markets and channels that recognise the quality of South Australian produce.”

Beston said it had increased production of mozzarella from its Jervois plant in SA from 4400 tonnes in 2019 to 15,000 tonnes this year.

“Japan is serious about the quality of the cheese it imports, and they have found a very capable and like-minded partner in Beston,” added Mr. Jorge.

“It’s a tough market to break into but the hard work of the Beston team has paid off.”

The KCG investment in Beston is subject to mutual due diligence.