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- Australian Dairy Nutritionals Group (AHF) has reflected on 2019 and its future plans as the first fully integrated producer of organic infant formula
- The company’s strategy is to convert milk produced on its own farms into organic infant formula at its own infant formula plant to be constructed
- In conjunction with the building project, AHF has trademarked Pure Organic and Tummy Health Infant Formula in both Australia and China
- The Board has also recently appointed a new Melbourne based Director and Deputy Chairman, Martin Bryant, to drive strategy and growth
- AHF has ended the day up an even five per cent with shares trading for 10.5 cents apiece
Australian Dairy Nutritionals Group (AHF) has reflected on 2019 and its future plans as the first fully integrated producer of organic infant formula.
AHF’s strategy is to convert organic milk produced on its own farms into organic infant formula at its own purpose-built infant formula plants.
The plant will be constructed on land it owns at Camperdown Dairy Park in South-West Victoria.
AHF owns and operates six high-quality dairy farms with five located in the “Golden Triangle” of Australia’s dairy industry in Victoria which produces over 15 million litres of organic and in-conversion organic fresh milk annually.
On November 22, its Yaringa farm in Nirranda South successfully obtained 100 per cent organic certification becoming AHF’s first fully certified organic farm.
AHF’s remaining farms are on track to achieve full organic certification through to 2021.
The company also released its processing capability and strategy process.
Its existing fresh dairy processing factory, Camperdown Dairy is located in Camperdown, Victoria and produces organic and non-organic dairy products such as fresh milk, premium butter, and specialised yoghurt.
AHF will execute its infant formula strategy in two stages with the first stage consisting of a purpose-built building on the Camperdown Dairy Park site to host the infant formula plant it purchased earlier this year.
The stage one plant consists of a drier together with a compatible evaporator and Nutritionals blending equipment that has the capacity to produce approximately 400,000-600,000 tins of infant formula per year.
AHF plans to produce its own branded range of organic infant formula using organic milk sourced from its farms.
Construction of the building component and recommissioning of the plant equipment is expected to cost approximately $5-$6 million.
Production of the milk powders is expected to begin in the second half of 2020 with organic infant formula expected to follow shortly after.
The board of AHF views this plant as an important first step to enter the organic infant formula market.
This process will enable the company to assess domestic and international demand for Australian manufactured organic infant formula and tailor its distribution strategy to maximise revenues for AHF.
Stage two of the strategy includes the purchase and construction of a larger drier and infant formula tinning plant having the capacity to produce over 10 million tins of infant formula per year.
The Camperdown Dairy Park building has been designed to allow for expansion to accommodate the larger drier and tinning line. However, a specific timeline has not been set for this process.
This stage will build on stage one and provide more capacity and revenue as the business grows.
In conjunction with this building project, AHF has trademarked Pure Organic and Tummy Health Infant Formula brands both in China and Australia and the internal development of new ranges of infant formulas is now well progressed.
The Board has also recently appointed a new Melbourne based Director and Deputy Chairman Martin Bryant.
Martin has significant strategic operational experience, particularly in Asia, which will drive strategy and growth.
AHF has ended the day up an even five per cent with shares trading for 10.5 cents apiece in a $38.95 million market cap.
