Mining giant Forrest grabs slice of Bega cheese

WESTERN Australian ore mining giant Andrew Forrest bought a $108million chunk of dairy processor Bega Cheese late last month.
An ASX announcement stated that Mr Forrest had purchased more than 20 mil-lion shares into the cheesemaker under his company Tattarang AgriFood Investments.
It means Mr Forresthas 6.61per cent voting powerinto the company,which has afactory on Princes Drive in Morwell.
The purchase further diversifies the billionaire’s portfolio after he bought fine boot manufacturer RM Williams last year, on top of other interests in agri-foods, marine and pastoral.
It comes after Bega reported before Christmas it was focussing on managing the “cumulative effect of the direct and indirect costs associated with COVID-19”.
It stated these impacts had been “extensive and significant” ranging from market disruptions from lockdowns, factory shut-downs, increased safety and testing and major supply chain cost increases.
Other changes included key markets in China affecting infant and toddler dairy products sales.
“Despite positive seasonal conditions, farm milk supply across the Australian dairy industry remains flat to declining with strong competition for supply continuing,” Bega said in a company notice.
“The company expects upward pressure on farmgate milk prices to remain for the balance of the year reflecting high global dairy commodity prices, limited supply availability and the resultant competitive circumstances.”
But it also stated Bega was comfortable with the “overall operations of the business”.
This included confidence in brand quality, planned investments growth and efficiency investments and the company’s ability to respond to market opportunities in Australia and internationally.
It said the short termimpacts of COVID and ahighly competitive milk procurement environmentare expected impact to this financial year’s earnings.
The company expects normalised earnings beforeinterest, tax and depreciation tobebetween $195million to $215 million.

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