ANOTHER SA company has made inroads into the Chinese market as Beston Global Food Company secured distribution for its dairy, meat, seafood and health food products.
The company, which is set to float on the Australian Stock Exchange this month, will have products sold in 150 cities across China.
It has signed the distribution deal with Chinese retail giant Dashang Group, which also has agreed to subscribe to 14.9 per cent of Beston’s stock as part of the $130 million Initial Public Offering. Institutional investors committed $100 million to BFC within four days of the offer being released earlier this month.
Dashang reported sales revenues of over AUD$40 billion in 2014 through shopping centres in
150 Chinese cities, including its own supermarkets and high-end gourmet specialty stores.
BFC chairman Roger Sexton said BFC had been invited to be the preferred supplier to Dashang for all Australian food and beverages.
BFC also has the opportunity to create and stock a Beston Pure Foods section in the up-market stores operated by Dashang.
“BFC has formed a close working relationship with Dashang following on from the signing of the Free Trade Agreement between China and Australia,” Dr Sexton said.
“Our two companies share a common objective of taking lean, green and safe products from high quality producers in Australia into the discerning consumer markets in China.”
Dr Sexton said the agreement with Dashang represented a significant link in the company's closed loop integrated supply chain in which BFC:
* Owns farms, production quotas and related property rights to harvest raw materials;
* Holds equity interests in food production companies; and
* Owns and controls direct-to-market distribution arrangements in key markets to enable value-add and margin creation at each step in the supply structure.
Products supplied to Dashang will include b.-d. Farm Paris Creek dairy products, Adelaide Hills, Ferguson Australia seafood products, Kangaroo Island, Scorpio Foods meat and other products under the Beston Pure Foods label.
Dr Sexton said BFC had also established a wholly-owned subsidiary in China through the acquisition of the Dalian Australian Food Expo Company.
The company – which consolidates about 7000 distribution outlets across China - will manage the import, customs clearance and distribution of BFC’s food and beverage products.
In addition, BFC has a customer relationship with on-line supermarket product distributor
Yihaodian – 51pc owned by Walmart and with 57 million registered users at the end of 2013.
“Beston Global Food Company will operate as a branded food company which, through its stable of quality food investments, will aim to provide high quality, safe, clean (natural and/or organic) food and beverage products to consumers,” Dr Sexton said.
"Our goal is to be recognised as a reliable, high quality and consistent provider to burgeoning global consumer markets which are becoming increasingly concerned about issues of food safety.”