China's dairy farming company Inner Mongolia Fuyuan Farming has agreed to acquire the majority stake in Australian dairy ingredient processor Burra Foods.
The move enable Burra to improve its access to growing Chinese market, as well as raise funds for the expansion of its diary facility in Korumburra, Victoria.
This agreement needs approval from Australia's Foreign Investment Review Board.
Fuyuan has many investors with the largest investor being China Mengniu Dairy (Mengniu), which manufactures and distributes dairy products across China.
Burra Foods' founder Grant Crothers and Japanese dairy distributor ITOCHU collectively hold a 21% stake in the company. Crothers will continue to serve as managing director and CEO.
Crothers said: "The new shareholder structure will provide Burra Foods with vastly improved access to new high-value milk and nutritional powder markets, facilitating low-risk growth up the value chain, and access to additional capital."
"We have always been about maximising value from the milk solids we collect and process and have taken a very cautious approach to China, appreciating the significant risks that come with the increasing opportunities available.
"There are only winners in this deal as the new structure enhances the future for our loyal milk supply partners, provides ongoing employment for our dedicated staff, while ensuring increased and stable supply to our existing customers whether they are located in Australia, Japan, China or other parts of the world."
