mmg.com.au

Bega Cheese, the parent company of Tatura Milk, has recorded a half year net profit of $14.9 million on higher production and sales figures.

The company has also announced it has renegotiated long term contracts with industry buyers which use product manufactured at the Tatura factory.

The board recently approved a major capital expenditure to expand capacity and further integrate the Tatura and Coburg operations.

Bega experienced a 9.6 per cent revenue increase to $491 million and earnings before income tax increased by 14 per cent.

Executive chairman Barry Irvin said the improved performance reflect improved volumes and efficiencies in cheese cutting and packaging and margin improvement in value added dairy products.

Bega declared a fully franked dividend of 3.5 cents per share payable on March 19.

The company experienced a $5.2 million loss in the first half of 2012, and has warned that the first half years are influenced by seasonal factors and this half year result may not reflect the proportional full year result.

Bega sees itself as among the top paying manufacturers for suppliers.

International manufacturer of children and infant nutritional products Mead Johnson leases a drier at Tatura and Tatura Milk has renegotiated an agreement enabling Tatura to access unutilised manufacturing capacity for Tatura’s own business.

Mead Johnson make products including Sustagen and Enfamil.

Another new agreement has been completed with Tatura Milk partners, Ingredia SA, which manufacturers milk protein concentrate, to allow use of underused capacity.

Tatura’s nutritional business is continuing to see growth, reflecting Asian market demand for these products.

The revisions at Tatura will give Bega more capacity to produce nutritional powders.