Bubs Soared On ASX On Announcing A Strategic Partnership With Bega Cheese’ Subsidiary Tatura Milk

Bubs Australia Limited

Bubs Australia Limited (ASX: BUB) has notified that it had entered into a long-term strategic supply partnership with Tatura Milk Industries (Tatura), a wholly owned subsidiary of Bega Cheese Limited (ASX: BGA), with an option to renew for another 3 years.

Bubs Australia was founded in 2006 and is domiciled in NSW, Australia. The company is engaged in the business of inspiring new generations of happy, healthy bubs through its variety of Australian made premium infant nutrition products. The products are widely sold in major supermarkets and pharmacies throughout Australia and are also exported to China, South East Asia, and the Middle East.

Tatura Milk had been manufacturing high-quality infant formula products for the domestic and export markets for over 25 years. Bubs products would be produced at its Tatura facility located in Victoria and thus close to primary sources of fresh goat milk. The nutritional wet blending of raw milk with other ingredients and subsequent spray drying will be carried out at Tatura’s state-of-the-art facility and then canned at Bubs’ existing CNCA licenced manufacturing partner, Australian Deloraine Dairy.

Mrs Kristy Carr, Bubs Australia Founder and Chief Executive said that now the company had reached scale, it was delighted to partner with Tatura, one of Australia’s largest and most reputable infant formula manufacturers. Bubs had been able to develop its goat baby milk formula in one step straight from farm gate was an “Australian first” for goat dairy. It happened due to the company having complete ownership of fresh goat milk in Australia.

Successful trials have been completed, with the initial commercial production commencing in March.

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Bega Chief Executive Officer, Paul van Heerwaarden, said that the company was excited to be partnering with Bubs Australia in the new venture. BGA had been associated with Bubs to produce a baby formula of the premium quality to satiate the rising demand for goat milk formula and a product which can be associated with Australia. Bega is looking forward to supporting BUB to attain its ambition to grow.

The enhanced formulation will contain higher levels of prebiotics (GOS) to aid digestion, in addition to Omega-3 DHA and Omega-6 ARA.

Mrs Carr said that with this development, the Company was tapping into the demand of Australian premium infant nutritional products.

Bubs goat milk products are ranged in Coles, Woolworths, Big W, Costco, and pharmacies throughout Australia, as well as leading eCommerce platforms in China, including Tmall, JD.com, Kaola and VIP.

On 31 January 2019, Bubs released its Activities Report and Cash Flow Statement for the second quarter, the period ended 31 December 2018.

Bubs Australia continued to maintain a strong balance sheet with $26.7 million in cash reserves as of 31 December 2018. The inventory position at the end of Q2 was circa $12 million, in line with the company’s routine stock holding requirements.

The stock of the company closed the day’s trading at A$0.590 on 27 February 2019, up by 4.425% from its previous close.


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