Float plan for Asian dairy push

KEYTONE Dairy plans to boost production and exports to China with the $15 million it raised ahead of its expected float on the Australian sharemarket.

The New Zealand-based dairy company – which sells milk powders, health and sports nutrition products – produces its own brands and manufactures for private labels.

It raised $15 million ahead of its expected ASX listing through the issuing of 75 million shares priced at 20¢ each, setting a market capitalisation of $30 million.

The company, which lodged its prospectus with ASIC in April, hopes its shares will start trading on the ASX this coming week.

Keytone currently has limited production capacity at its existing Christchurch factory and will use some of the capital raised through the initial public offering to build an additional facility in nearby Rolleston.

Non-executive chairman Bernard Kavanagh, a former general manager of Warrnambool Cheese and Butter, said he expects annual production to increase from 1500 tonnes to 5000 tonnes.

The company is actively seeking supermarket contracts after it started providing Woolworths’ New Zealand subsidiary Countdown with milk powder in 2017, according to Keytone’s prospectus.

But the majority of the increase will be sold in China, where more than 70 per cent of Keytone’s products are exported.

Taiwan, Vietnam, the Philippines, Indonesia, Japan and the Middle East are other potential markets for export, Mr Kavanagh said.