SYDNEY, April 30, 2012 /PRNewswire-Asia/ -- Freedom Foods Group Limited (ASX:FNP) is pleased to announce today that its wholly owned business unit, Pactum Australia (Pactum) is planning to build a state-of-the-art UHT processing plant in South East Australia to meet demand for high quality dairy milk in export and domestic markets.
The primary market focus of the new capacity will be on supply of high quality UHT dairy milk for export markets to proprietary and private label customers in South East Asia, including China. With rising incomes and improving diets, these markets will continue to experience strong, long term demand for high quality safe dairy products originating from low cost production bases such as Australia. Australian dairy milk is well regarded in Asian markets for its consistent high quality.
Pactum has experienced significant growth (34% in volume) over the past few years, and the new production capacity (the first Australian greenfields expansion in UHT in last 10 years) will enable it to meet growing demand for UHT dairy milk, while providing additional capacity for value-added beverages at its Sydney facility. Pactum is currently expanding its capabilities at the Sydney facility to provide portion pack (200ml – 330ml) configuration for value-added beverage products.
The location of the new plant in South East Australia will provide long term access to the most sustainable and economic source of dairy milk. Pactum has strong links into the Australian dairy industry and will expand its long term arrangements with Australian dairy farmers for supply of high quality dairy milk. The new facility will provide additional growth opportunities for Australian dairy milk supply, in a form that is value-added and sustainable for long term export market development.
The initial capabilities of the proposed plant will be 250ml portion pack and 1 Litre UHT configuration. Initial capacity will be up to 100m litres, with capability to significantly increase this capacity in the longer term. The facility will be built on state of the art processing and packaging capability, with a focus on cost efficiency. It will incorporate a smaller carbon footprint, use considerably less water, and be more energy-efficient than equivalent UHT facilities in Australia and SE Asia.
Subject to final feasibility and site selection, Pactum expects site preparation to begin from October 2012 with commissioning by mid-2013.
Pactum expects final feasibility and site selection to be completed by June 2012.
About Pactum Australia
Pactum is an independent low cost manufacturer of a broad range of UHT products for private label and proprietary customers. Pactum currently manufactures a range of UHT beverages in 1 Litre format including dairy alternative beverages (Soy, Rice and Almond Milk), Cooking Stocks, Dairy Milk, Lactose Free Milk and other non-dairy beverages. Pactum is expanding its packaging capability at its southern Sydney site to provide portion pack UHT (200-330ml configuration) for value-added beverages. The expansion at a total investment cost of approximately AUD$7 million is scheduled to be completed by September 2012 and will provide portion pack capacity of up to 40m packs per annum.
Asian Dairy Demand
China and South East Asia have only begun to consumer increased quantities of milk. Currently China's per capita dairy consumption at 12.3kg / capita* is 86% below US per capita consumption, with Indonesia at 1.4kg / capita* and Vietnam at 2.0kg / capita*. Overall demand for dairy in the region is being driven by increasing population, rising gross domestic product, higher disposable incomes and increased urbanisation. These factors are leading to change in diets and increased consumption of dairy products. Local supply in Asian markets to meet this demand will be challenged due to increased cost of production and quality of product, with increasing requirements on surplus producing countries such as Australia and New Zealand.
*Source: USDA
For further information, please contact:
| Customer Contacts Amine Haddad CEO Pactum Australia Tel: +61-2-9526-2555 |
Corporate Contacts Rory J F Macleod Group Executive Director Freedom Foods Group Limited Tel: +61-2-9526-2555 |
