Australia’s largest farming co-operative Murray Goulburn will go ahead with its $500 million public listing plan after shareholders strongly voted in favour of the major capital restructure.
The co-op is wholly owned by over 2500 farmers, who approved the plan to keep its current structure and raise the required capital from suppliers and third-party investors by offering only non-voting shares via a unit trust listing on the Australian Securities Exchange.
“The strength of today’s vote demonstrates that MG’s suppliers are not only overwhelmingly in favour of the new capital structure, but also see the growth that lies ahead for dairy foods.” Philip Tracy, chairman of the Murray Goulburn, said after the shareholder’s extraordinary general meeting in Melbourne, which comes after 18 months of consultation and discussion on the plan.
Managing Director Gary Helou said the approval of the capital structure allows the co-op to invest to further the strategic shift towards premium value-add dairy foods and in the process reduce exposure to the volatility of the dairy commodity price cycle.
The capital boost is expected to expand its product mix to higher value-added products such as nutritional powders, dairy beverages, cheese and infant formula to capitalise on the so-called Asian dining boom and bolster farmgate prices.
However, despite their popularity in Asian markets, especially in China, Australian dairy products face price pressure and increased competition after Russia’s embargo on dairy products in response to sanctions and the EU’s diversion of exports to Asian markets.
Murray Goulburn received approximately 3.4 billion litres or 37% of Australia’s milk and generated sales revenue in excess of $2.9 billion.
