New Asian venture

15 Sep, 2004 10:00 PM
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THE directors of Challenge Dairy Co-operative last week briefed shareholders on a proposed joint venture with Singapore¹s QAF Limited.

QAF is a diversified, publicly listed Singaporean company with significant interests in consumer manufacturing, distribution and marketing.

Listed in 1967, QAF has significant assets in the pork industry in Australia.

The proposal involves QAF subscribing for shares amounting to $8 million in the wholly owned Challenge subsidiary, Challenge Australian Dairy.

Challenge Australian Dairy owns and operates the processing and distribution facilities at Capel. Challenges Boyanup operations would be included in the joint venture.

The benefits to members would include the provision of capital to develop a modern manufacturing facility, immediate access to existing Asian markets and the capacity for Challenge to maintain autonomy.

QAF would have 51pc of shares and Challenge 49pc, with Challenge directors satisfied that the legally binding provisions, in the shareholders agreement, would protect Challenge interests and provide a suitable balance.

In addition to the $8m contribution, QAF have undertaken to ensure the joint venture has access to $5m in funding, which would cover working funds and capital expansion programs for at least three years.

Challenge directors have given notice of a general meeting to be held on Friday, September 24, for members to agree to the proposal.

The directors unanimously recommended that members support the resolution.

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