Goodman Fielder sells Champion for $51m
Food producer Goodman Fielder has sold its New Zealand Champion Milling business to Japan's Nisshin Flour Milling for $51 million.
The Champion Milling business has 130 staff, with flour mills in Christchurch and Mount Maunganui.
Goodman Fielder said Nisshin had indicated its intention to retain all staff.
Goodman Fielder chief executive Chris Delaney said the sale was part of its strategy to divest non-core assets.
"Together with the sale, we have also structured a long term supply partnership with Nisshin to ensure Goodman Fielder maintains an efficient supply of flour and related products for our business in New Zealand."
Under the agreement, Goodman Fielder would retain its business of selling flour to retailers, in-store bakeries and hot bread shops, while Nisshin would supply commercial and industrial customers in New Zealand.
Nisshin is the largest flour miller in Japan with annual revenues of $2.5 billion.
Delaney said the proceeds of the sale, expected to be completed in February, would be primarily used to repay debt and strengthen its balance sheet.
Goodman Fielder sold its Integro commercial oils division for A$170 million (NZ$218m) to Australian-listed GrainCorp in August.
Earlier that month it reported a A$147 million (NZ$187m) loss for the year to June 30, thanks in part to a "perfect storm" that saw volumes in its bakery division fall, commodity prices rise and retail prices plunge on competition from cheaper private labels.
The company has said it is on track to make A$100m in annualised savings by 2015. It is in the process of rationalising its manufacturing facilities from 53 to 35 sites. That includes 11 sites already closed or disposed of, including the Integro and Champion Milling sites.
Goodman Fielder is pouring its energy into boosting earnings in its core divisions of bakery, dairy, flour and cake mixes, spreads, and dressings and mayonnaise.
Shares in the company closed at 85c on the NZX yesterday, down 1.2 per cent.