Michael Luu: In today’s conference, welcome to the CFO of Beston Global Food Company (ASX: BFC) Darren Flew. Darren, welcome to FNN.
Darren Flew: Thanks Michael. It’s good to be here.
Michael Luu: Now, first of all, can you start with an introduction to the business?
Darren Flew: Beston Global Food Company is a proud South Australian company. We are a multiple award winning dairy company. Our main products are dairy products, mozzarella, whey powder, cream, butter and a significant increase in our production of lactoferrin. The plant is about to be commissioned. Our Shepparton meat products include diced and ground ingredients for other manufacturers, premium burgers and meatballs, and ready-to-eat dishes, such as lamb shanks. The dairy sector has grown significantly in recent years and now brings in around $ 100 million per year. And our meat operations in Shepparton, they’re making about $ 10 million a year right now at the moment.
Michael Luu: Awesome. And Darren, you mentioned that Beston has grown tremendously over the past few years. How was it done?
Darren Flew: The center of our operations is in Jervois. The plant was commissioned in 2018. Previously, we did not produce mozzarella, but produced cheddar at the Murray Bridge plant. Producing mozzarella rather than cheddar allows the cream to be separated from the milk and sold separately. So making mozzarella is actually a higher value business than making cheddar. So investing in the mozzarella plant – started in 2016, but commissioned in 2018 – was a strategically important decision for the company.
Michael Luu: A key objective has been the expansion of lactoferrin production in your dairy in Jervois. Can you elaborate on this subject?
Darren Flew: First of all, lactoferrin. What is lactoferrin? Lactoferrin is a whey protein, which strengthens the immune system. It has strong antimicrobial, antivirus, antibacterial, and antifungal properties and is probably best known, if you’ve heard of it, for use in infant formula. There is a small amount of lactoferrin protein in milk. We extract about 130 kilograms of lactoferrin from every million liters of milk we process. Lactoferrin at the end of the day is sold in powder form, so the liquid concentrate from the extraction process is dried. It is either freeze-dried or atomized to meet customer specifications.
Michael Luu: Now I am also aware that you have plans to expand lactoferrin. Can you give us an update on this project?
Darren Flew: Lactoferrin is extracted from milk, from skim milk, and we have installed milk handling improvements and most importantly, two lactoferrin extraction columns in the past eight to nine months. The first phase of commissioning – we have already announced it to the market – the first phase of commissioning, we were able to obtain a lactoferrin powder with a purity of 95%. It is a top quality product available for sale in the market. I’m very happy with how quickly we got to this level of purity. The remaining phase of commissioning is actually focused on calibrating the process to ensure that we are maximizing the lactoferrin yield from the milk while maintaining purity.
Michael Luu: Now to finances and strategy. Could you tell us about your results and tips for Exercise 20?
Darren Flew: The first half of the year reflected the continued growth of the business I was talking about before. The milk supply increased by around 28 percent in the first half of the year. Mozzarella production increased by around 30 percent to just over 5,500 tonnes. Lactoferrin production from our old lactoferrin plant, which is being decommissioned as part of this process, was around 640 kilograms. Half-year revenue increased $ 53 million. And we actually reported a loss for the half of $ 8.8 million due to a number of operational issues at the Jervois plant in the first half of the year, which were largely resolved in the second half of the year. . As such, our operating forecast for the remainder of the year reflects this continued growth throughout FY21.
Michael Luu: Fantastic. Finally, before you let go, is there anything else you would like to add?
Darren Flew: Really to sum up, Michael, we have been very focused over the past 12 months on completing the lactoferrin project on time and on budget so that we enter FY22 with this important new revenue stream, an additional online revenue stream. We have moved to 24/7 operations as a sign of growth as we continue to grow until FY 22. So a lot of effort has been put into ensuring that the reliability of the factory is improved, that the problems that we saw during the first half of 21 have been solved. And, as we move into FY22, we’re in a very good position to ensure that the fundamental changes we’ve made to the business over the past few years are complete, and we look forward to FY22 with great confidence.
Michael Luu: Darren Flew, thank you for your introduction to the business. And we look forward to contacting the base with you in the near future for further updates.
Darren Flew: Thanks Michael.