ASX-listed Beston Global Food Company has entered voluntary administration, with the administrators pursuing recapitalisation or a sale of the business.
Beston is a major processor in the Australian dairy industry with two production facilities in South Australia processing butter, milk, mozzarella, and certain other cheeses.
The company has appointed KPMG’s Tim Mableson, James Dampney, Gayle Dickerson and David Kidman as voluntary administrators.
The administrators have assumed day-to-day control of the company’s operations and are seeking expressions of interest to recapitalise or acquire the business.
“As administrators, our initial focus will be to stabilise the business. We will be working with stakeholders, farmers, partners and customers to achieve the most optimal outcome,” said Mableson.
In a statement, Beston said it had faced a “perfect storm of adverse events”, including higher debt after Covid, unfavourable global dairy prices, and high operating costs (particularly due to energy prices).
The persistence of cost pressures, along with the higher-than-expected milk volumes and farmgate prices that have remained uncompetitive versus global markets, have impacted profits and cash flows, the company added.
While Beston’s Lactoferrin and fast-growing Cream Cheese business has earned strong profits, the cheese and whey powder business (which accounts for around 80 per cent of sales) has incurred losses due to ongoing cost/price pressures.
The board has made several operational enhancements and divested the meat processing business but was unable to help the company overcome the challenges.
