Bega Cheese (ASX:BGA) and Bubs Australia Limited (ASX:BUB) have today announced a long-term strategic supply partnership.
Bega company, Tatura Milk, has entered a supply agreement with Bubs to convert fresh goat milk directly from farm gate into Infant Formula nutritional base in one step, without intermediate spray dry to whole milk powder.
The deal will reduce overall production cost and shorten the cash cycle and lead time for finished products.
The end result will be an enhanced formulation with increased levels of prebiotics to assist digestibility.
Bega says its excited to be partnering with Bubs Australia in this new venture. Bega has been working closely with Bubs to develop an infant formula of the highest integrity and quality aimed at satisfying the increasing demand for both goat milk formula and a product that can be genuinely positioned as Australian.
In a separate announcement Bega Cheese Limited says it has decided to stop manufacturing cheddar and mozzarella cheese at its Coburg facility and the site will be closed effective immediately.
Whilst some staff will be offered employment at other Bega sites, there will be some redundancies.
The decision to close the site was made following a review of our network which concluded that the Coburg site’s capacity and city location cannot viably support Bega’s expected future growth.
Shares in Bega Cheese (ASX:BGA) are trading 1.87 per cent lower at $4.73.