Japfa expands with partnerships in China

The move is aimed at strengthening AustAsia, a subsidiary of Japfa.

Japfa Ltd had entered into two separate agreements with Genki Forest and Honest Dairy, the company announced today via press release.

Both companies are food and beverage focused and are existing clients of AustAsia, a subsidiary of Japfa. The branch is responsible for farms that produce both raw milk and beef in China.

Genki Forest, a company focused on sugar-free, low-calorie drinks, is slated to purchase 5% of equity stakes in AustAsia for $78.6m (US$58.4m). Honest Dairy, a probiotic yoghurt producer based in Guangzhou, looking at 2.5% for $39.3m (US$29.2m).

Overall, the aggregate consideration of $117.83m (US$87.6m) means a 100% equity value of $1.57b (US$1.69b).

With these acquisitions, as well as a 25% equity stake partnership with Meiji last July 2020, AustAsia will have control over all farming operations in China.

Japfa CEO Tan Yong Nang focused on how this move would help affirm AustAsia’s position as a producer of raw milk in China.

“We have been building AustAsia to become the leading independent raw milk producer in China by championing our industrialised business model for milk production and our strong dairy farming expertise, with the consistently highest milk yields in China," Tan said.

"Today we believe that AustAsia will benefit from the addition of two Chinese strategic partners who share our growth ambitions in China and our focus on quality. Together with all our partners, we expect to further enhance AustAsia’s position in the dynamic Chinese dairy market and create long term value.”

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