Dairy

Freedom Foods to spend more on Shepparton factory

By Geoff Adams

Dairy foods processor Freedom Foods is ramping up its production facilities in Shepparton and is embarking on a $130million equity-raising offer for the group.

Most of the money is expected to be spent on expanding its Shepparton dairy-processing factory.

The Shepparton site already includes a large UHT milk processing plant.

Freedom Foods’ chief executive officer Rory Macleod said the new equity-raising announced by Freedom Foods had the company’s Shepparton plant as the primary focus. ‘‘Of the $130million to be raised, $100million will be invested in a further and accelerated upgrade of the Shepparton facility.

‘‘Customers are increasingly recognising the company’s broad range of UHT capabilities housed at our Shepparton site as well as the Ingleburn plant in Sydney,’’ Mr Macleod said.

‘‘So at a testing time for the dairy industry, Freedom is lifting the size of its milk pool to more than 400million litres next financial year as the company takes an industry-leading role to meet the greater demand for UHT dairy products in Australia, South-East Asia and China.’’

He said Shepparton was also key to the company’s ability to value-add, and the new investment plans for the nutritional ingredients business would help meet the strong demand as it expanded capacity and extended into new protein streams.

‘‘We firmly believe this continuing investment demonstrates our commitment to Shepparton and the broader region as it secures jobs and supports the local dairy industry.’’

The equity-raising is split between an offer of one new share for every existing 18 Freedom Foods shares and an institutional placement of new shares at an offer price of $4.80 per new share to raise about $65million.

The company said it wanted the money to accelerate Freedom Foods’ growth strategy for nutritional ingredients and for more capital to meet demand growth.

In a statement released to the stock market, the company said the Freedom Group was leveraging its significant and growing dairy capabilities to build a branded high-margin product portfolio in specialty nutritional products.