INDEPENDENT dairy processor United Dairy Power (UDP) has been sold to a Hong Kong-based buyer.
Company founder and sole owner Tony Esposito yesterday confirmed he has entered into a sale agreement with William Hui, a Singaporean entrepreneur based in Hong Kong.
Yesterday’s announcement confirmed what had become an open secret among the 50 or so UDP suppliers in the south-west during the past few weeks.
Mr Hui, 46, is chairman and a major shareholder of CD and DVD manufacturer Media Technology, which is listed on the Singapore Stock Exchange.
Mr Esposito said he would step back from the business during the next few months but intends to remain involved. He said Mr Hui was “the ideal owner to guide the company on the next stage of its growth”.
The sale, following Saputo’s $530 million purchase of Warrnambool Cheese and Butter, underlines the global interest in Australia’s dairy assets as demand for products surges with the growth of the Asian market. Mr Hui paid about $70 million for UDP.
UDP has a head office in South Melbourne, processing facilities at Poowong in Gippsland and Murray Bridge and Jervois in South Australia and a distribution facility at Shepparton. The company has about 150 suppliers and takes in 300 million litres of milk annually, about three per cent of Australia’s production.
It processes a further 200 million litres purchased from rivals and generates sales of about $200 million and profits of $15 million annually.
Mr Esposito founded UDP in 1999, initially as a milk broker, but has acquired several small processing plants in recent years and moved into making cheese and butter under the UDP name, as well as Caboolture mozzarella cheese, a leading brand in the commercial pizza industry.
The business will continue to be managed by the current team, led by Mark Smith who will become chief executive.
Mr Smith said it will be “business as usual” for all involved with the company.
“I want to assure our staff, suppliers and customers that it is business as usual and they should expect the same high service level they have come to expect from UDP. There are no plans to change any supplier arrangements, and we of course intend to maintain our industry-leading ratio of field representatives to farmers.”
Mr Esposito has been looking for a buyer for almost two years.