Ridley said the sale is worth just under AUS$55m (US$42.7m). The facility, which only opened in July 2019, was underutilized, added Australia’s largest feed manufacturing company.
It said this divestment would allow it to “reset” its manufacturing cost base. Its share price jumped on the news of the sale.
Ridley's extruded feed plant in Narangba, Queensland, which is currently being expanded, will continue to supply existing and new aquafeed customers.
“This will consolidate our aquaculture feed production into one facility, providing a competitive and lower cost supply chain to service the Australian and New Zealand aquaculture industry, including our Tasmanian customers,” said Ridley Corporation managing director and CEO, Quinton Hildebrand.
Ridley is also a feed supplier to Australia's dairy, poultry, pig, sheep, and beef industries.
Rob Koremans, CEO of Nutreco, said the investment was strategically important. Skretting has been manufacturing feed at its Cambridge facility in Tasmania since the 1990s.
Security of supply
Melissa Abbott, GM at Skretting Australia, told us: "The Australian and New Zealand aquaculture sector is growing, and Skretting Australia fully intends to support that growth by providing ongoing certainty to clients regarding feed supply. This expansion of our manufacturing capacity is a continuation of Skretting’s long-term commitment to the Australian and New Zealand aquaculture industries. This acquisition will ensure that Skretting Australia remains well positioned to meet growing market demands and effectively serve our clients both now and into the future."
The deal is subject to approval from the Australian Competition and Consumer Commission (ACCC) and is expected to conclude later this year.
Ridley expects a pre-tax profit of AUS$7m upon completion.