Meat company Affco falls for dairy cash cow

Wednesday 14 March 2007

The lure of riches from milk has proved too tempting for listed meat company Affco.

Affco announced yesterday it had formed a new subsidiary, Dairy Trust, to become a milk processor with annual turnover eventually expected to be in the hundreds of millions of dollars.

Sam Lewis, Affco's chairman, said the board decided to establish Dairy Trust after considering growth options. Affco would only be an investor in, rather than operate, Dairy Trust.

He said the establishment of Dairy Trust was "a natural progression of the food business" and Affco would have the ability to exploit synergies between dairy farming and meat processing, such as dairy animals being sent for slaughter.

Dairy Trust could not say what its product mix would be but expected it would be involved in milk powder given the industry's activities were heavily weighted towards this.

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