)
Australian food producer SPC Global Holdings (ASX: SPG) is extending its reach into Asian markets after sealing its first major deal since a $342 million merger with The Original Juice Company and Nature One Dairy last year.
The 10-year exclusivity agreement, described by the group as a landmark deal, is expected to generate a total of $250 million over the life of the contract with SPC Global’s products to be sold through the Mannings retail network - the largest health and beauty chain in Hong Kong.
The agreement, secured with Mannings’ owner DFI Retail Group, will see Nature One Dairy’s products positioned on the shelves of more than 320 Mannings outlets in Hong Kong and Macau. The company also has 120 outlets in mainland China.
SPC Global says the agreement is a milestone for the powdered milk division of its international division, Nature One Dairy (Hong Kong).
"We’re delighted to establish a long-term partnership with such a reputable retailer as Mannings,” says Nick Dimopoulos, CEO of Nature One Dairy (NOD).
“This agreement will allow us to expand our relationship by supplying more high-quality products throughout Mannings’ extensive retail network. We look forward to growing together in the years to come."
DFI Retail Group operates almost 11,000 outlets in South-East Asia, employs about 200,000 people and generates annual revenue of more than $40 billion.
"NOD’s strategic partnership is based on a long-term relationship that Nick has had with Mannings and the result of months of hard work and negotiations by our senior management team,” says Robert Iervasi, the managing director of SPC Global.
“This partnership highlights NOD's dedication to delivering premium products worldwide, while further strengthening its position throughout Asia.
"With our recently announced merger and the exclusive partnership with Mannings now in place, NOD is set to play a central role in SPC Global's vision of building a global food powerhouse.”
The latest agreement builds on SPC Global’s long-term strategy announced following the three-way merger announced in October last year to become a global leader in the food and beverage sector.
The merger, which was completed early last month, has given ASX shareholders an opportunity to invest in the formerly privately owned SPC Global, once known as APC Ardmona and one of Australia’s largest producers of packaged fruit, tomato-based products, baked beans, spaghetti and ready-made meals.
The merger was effectively a reverse takeover by SPC Global which took a 69.2 per cent stake in the merged entity.
Financial results releases to the ASX last month show SPC Global posted EBITDA of $10.6 million in FY24 from gross revenue of $272.3 million. The company posted a bottom-line loss of $11.4 million for the year, which was down from a $24 million loss in FY23.
Nature One Dairy posted a net profit of $5.5 million in FY24, up more than 10 per cent from the previous year, driven by a 34 per cent increase in revenue to $46.05 million.
The deal with DFI Retail Group notionally represents an average $25 million a year in additional annual revenue for the Nature One Dairy business over the next decade.
)
