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Kirin mulls LDD sale
Posted on Wednesday, 12 September 2018 09:36
Kirin Holdings has launched a strategic review of options ranging from a sale to investing in the Australian and New Zealand dairy processor Lion-Dairy and Drinks (LDD).
The business in question is one of four housed within Australasian subsidiary Lion, which in charge of management administration of the Japanese beer and beverage manufacturer’s Oceania integrated beverage business division.
LDD produces, markets and distributes some of Australia’s most iconic brands in milk, dairy beverages, cheese, yoghurt, juice and soy, according to the website.
Every year the unit purchases around 1.00 billion litres of milk from over 550 of the country’s dairy farmers, and crushes some 75,000 tonnes of fruit from orchards across the country.
In 2014 LDD came under Kirin’s turnaround programme after incurring a writedown and has since restructured and made significant progress on profitability.
Kirin said: “Having delivered this improved business performance and re-positioned the business for growth, it is appropriate at this point in time to consider the best pathway forward to maximise its sustainable growth potential for the future.”
With this in mind, the corporation intends to weigh up options such as retaining and investing in, and an outright sale of the unit acquired a little over a decade ago for USD 2.60 billion from San Miguel.
Kirin stressed no decision has been made at this time on LDD, which booked revenue of JPY 71.30 billion in the six months to 30th June 2018 (H1 2017: JPY 74.70 billion) and is expected to post JPY 153.10 billion at its top line in FY 2018 (FY 2017: JPY 153.40 billion).
Declines were recorded in LDD’s ambient and chilled juice categories in Q2 2018, when compared with Q2 2017, and it resulted in lower revenue and profits for the business.
In contrast, the division’s key milk-based beverage brand, Dare, was up 8.3 per cent year-on-year.
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