December 23, 2014

Parmalat Australia acquires Longwarry Food Park for US$54 million

Parmalat Australia, the country's fifth-biggest dairy company, has bought specialty dairy processor Longwarry Food Park for Aus$67 million (US$54.3 million), an acquisition coming after its Aus$120-million (US$97.22-million) purchase early this year of Harvey Fresh.

With the two acquisitions, which add 230 million litres of milk to Parmalat Australia's annual processing throughput, the company, which is controlled by the French group Lactalis, would be catapulted to the No. 3 position among Australia's six major producers. It would control more than 12% of Australia's 9.2-billion-litre annual milk production.

The latest acquisition will also enhance Parmalat Australia's export business. At present 90% of its turnover caters to the volatile domestic fresh milk market, according to The Australian Financial Review. On the other hand, the Longwarry exports 80% of its specialised production of milk powders, cream cheese and UHT milk.

The latest Parmalat acquisition will still need the approval of the Foreign Investment Review Board. Under the new rules any foreign takeover of an Australian agribusiness valued at more than $53 million must pass the national interest test.