Japfa buys two dairy farms to boost China expansion
This comes as the Group plans to be the leading raw milk producer in China.
Agri-food company Japfa Ltd. has acquired two dairy farms in Shandong, China as it strengthens its foothold in China.
AustAsia, which operates the SGX-listed firm’s dairy and beef farming businesses in China, acquired the entire issued capital of Falcon for US$123.4m.
Falcon holds 100% of the capital of Pure Source Farm Company, which owned the two dairy farms. The farms have a total capacity of 16,000 heads of cattle.
Edgar Collins, Head of Dairy of Japfa Ltd and Managing Director of AustAsia, said the acquisition allows the group to cut the lead time in expanding their capacity, compared to building new farms from scratch.
“This is even more important in the current favourable raw milk price environment arising from the supply shortage in the Chinese dairy market,” he also said.
The demand in China for quality and healthy dairy products is expected to grow in the coming years and AustAsia is well positioned to capitalise on this growth given its strong expertise in dairy farming and quality raw milk production.
The acquisition of Pure Source farms will further boost AustAsia’s capacity and accelerate its expansion in China. The transaction is expected to close on or about 30 June 2021.