Blow for Bellamy’s
China says new plant fails grade
BABY formula and dairy company Bellamy’s Australia has suffered another major blow after its Chinese importer said the newly purchased Camperdown canning factory failed to meet licence standards.
In a statement to the Australian Securities Exchange yesterday, Bellamy’s was forced to request a trading halt of its shares, while it assessed the repercussions of the suspension.
Under Chinese law, companies selling into China are required to have both their facilities and products certified and licensed.
However, Bellamy’s said yesterday the CNCA, Certification and Accreditation Administration of the People’s Republic of China, was suspended for the new Camperdown facility in Victoria.
Bellamy’s only this week completed a $60.4 million fundraising to pay for the $28.5 million purchase of 90 per cent of Camperdown Powder and to fund upgrades at the factory.
At the time, the company said the acquisition was a key component in its future export strategy to China.
The existing CNCA licence was a major contribu- tor to Camperdown’s value. The company had also intended to earn income through a lease arrangement of a “second slot” at the Camperdown factory to a separate dairy company to process its products for China.
“The trading halt is requested to allow the company to determine the reasons and impact of the Camperdown suspension of its CNCA licence by the Chinese authorities overnight,” Bellamy’s company secretary Melinda Harrison said yesterday.
Bellamy’s said the suspension would not disrupt its manufacturing or supply ar- rangements which are done through Fonterra and Tatura Milk under separate CNCA licences.
The Melbourne factory was not due to come on line until next year. However, this was just another blow to the beleaguered formula maker.
The one-time Australian dairy industry success story has this year suffered falling sales in China, a loss of local market share and the resignations of its long-term chief executive Laura McBain and chairman Rob Woolley.
After announcing the Camperdown purchase last month, Bellamy’s also issued a profit downgrade for the second half of the June 2017 financial year. It reversed previous profit forecasts of up to $13 million to an expected loss of up to $14 million.