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On September 29, Bright Dairy & Food, a leading Chinese dairy company, announced plans to sell a portion of its New Zealand assets to Abbott Laboratories, a U.S. pharmaceutical giant, for $170 million. The move is driven by losses stemming from underused production capacity.
The New Zealand subsidiary, Synlait Milk, will transfer ownership of its Pokeno manufacturing plant, which specializes in nutrition powders, along with a blending, canning facility, and a warehouse in Auckland to Abbott Nutrition NZ, the local branch of Abbott Laboratories. The transaction is anticipated to be finalized by April 1 of next year.
The Pokeno plant is a modern facility capable of producing 40,000 tons of nutrition powder annually. Its output includes high-quality industrial powders, nutritional formula milk powders, and other related products. The blending and canning operations and the warehouse work in tandem with the Pokeno factory to establish a comprehensive supply chain.
This sale is expected to help Synlait tackle operational hurdles, generate significant cash flow to reduce debt, and cut down on the need for additional working capital loans while lowering interest expenses. Bright Dairy, which owns a 39.1% stake in Synlait, commented that the deal will bolster the company’s financial stability and allow the proceeds to be used primarily for debt reduction.
According to Synlait’s financial report for the fiscal year ending July 31, the company’s net loss after tax decreased by 78%, reaching NZD 39.8 million (approximately USD 23 million). Meanwhile, revenue increased by 12% to NZD 1.8 billion (around USD 1.1 billion). CEO Richard Wyeth highlighted these figures during the earnings call.
As of 4:25 p.m. local time, Synlait’s shares were up 15.7%, trading at 81 New Zealand cents (about 47 US cents). Bright Dairy’s stock declined slightly by 0.9%, trading at CNY 8.39 (roughly USD 1.18) during the afternoon session in Shanghai.
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