The listed SA company announced the 3600-tonne annual mozzarella contract to the ASX this morning five minutes before a separate announcement advising the market of the resignation of CEO Jonathan Hicks following a three-month period of compassionate leave.
The 18-month cheese contract takes effect from August 1 and includes options to renew.
The company produced about 12,000 tonnes of mozzarella in the 2020-21 financial year, contributing about 60 per cent of the company’s revenue, which is expected to be about $115 million.
Beston can produce up to 15,500 tonnes of mozzarella a year at its new Jervois plant, about 25 km south-east of Murray Bridge.
The company’s domestic customers include Woolworths, Metcash, Costco and McCain and products are exported to Thailand, the Philippines, Vietnam China, Malaysia and South Korea.
Interim CEO Daren Flew said the new contract meant that Beston now had about 50 per cent of its total mozzarella production capacity locked up with repeat “blue-chip food manufacturing and retail companies in Australia”.
“The contract reflects the results of three years of hard work from the combined efforts by Beston’s sales and production teams and comes on the back of extensive trials undertaken with the customer,” he said in the ASX statement.
“Our customer prides itself on the quality of its frozen food products and hence it is very pleasing to have the premium quality of Beston’s mozzarella and other cheese products recognised and endorsed by one of the world’s leading food companies.
“The contract again highlights the benefits of the state-of-the-art mozzarella plant that Beston installed at Jervois which has the flexibility to produce mozzarella of different specifications to meet the particular requirements of different customers.”
However, Frew said the company’s bid to build its export base, which accounts for about 20 per cent of sales, had been hampered by the significant reduction in global shipping services as a result of COVID-19 restrictions.
“Finding container space to meet export deliveries has become difficult,” he said.
“Having more of our market on-shore will be beneficial over the next 12-18 months as we continue to build export opportunities for when these markets become more open and accessible.”
Meanwhile, Hicks’ resignation is effective from today and follows a three-month period of compassionate leave due to the serious ill health of his partner.
In his resignation letter, Hicks said it had been an extremely difficult decision.
“However, considering the positive trajectory of the company, the key catalysts that have been achieved and the solid delivery on the strategic plan, I am very confident that BFC is on a strong path to sustainable profitability,” Hicks wrote.
Beston chairman Dr Roger Sexton said Hicks had been an extremely hardworking and energetic CEO.
“We are understanding of his decision, which we have accepted with regret,” he said.
“On behalf of all shareholders, suppliers and staff, we wish him and his family the very best of outcomes.”
Frew will continue in his role as interim CEO while the company conducts a national and international search for a replacement for Hicks.
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