The co-founder of the world’s largest vertically integrated organic dried vine fruit producer - Mildura's Murray River Organics – has distanced himself from comparisons with infant formula manufacturer Bellamy’s.
Analysts at most Australian broking houses covering Bellamy’s, which sells organic formula into China, tipped its shares would rise by between 30 per cent and 65 per cent over the next 12 months.
Brokers drew parallels with Murray River Organics, as both companies supplied organic products.
But Murray River Organic’s chief operating manager Jamie Nemtsas said there was no comparison with Bellamy’s. “Bellamy’s is a one trick pony,” Mr Nemstas said. “We don’t survive off China, we don’t tap into China in any great measure, although we plan to do so in the future.”
Bellamy's, which earlier this year recorded 331 per cent growth in revenue from sales to wealthy Chinese customers, went into a trading halt, after its share price dropped sharply.
Mr Nemtsas said Murray River Organics was truly vertically integrated, with more than 1620 hectares of vineyards, at Colignan, south of Mildura. The company also had a certified organic processing facility, in Mourquong, New South Wales, and a new organically certified packaging facility in Dandenong.
Products were sold to 26 countries, largely into what Mr Nemtsas said were “mature, high GDP countries, such as Japan, America and northern Europe.
“We are really vertically integrated, we control our supply chain and are selling a product, not just to China, but to the whole world,” he said. “Ours is not a bubble; ultimately, price of organic dried fruit has been pretty well consistent over the past five or six years.”
Broker Acorn Capital, which also backed Bellamy's, bought into Murray River Organics' two capital raisings.
Acorn portfolio manager Robert Bruce said the money was raised to provide capital for acquisitions and expansion in processing capacity. “Now they are going onto the listed market, that provides a greater opportunity for a broader range of investors to participate in the company,” Mr Bruce said. “We are of the view it has a good, long term potential.”
He agreed Murray River Organics was different to Bellamy’s, in that it had not focused solely on the China market. “It is a future opportunity and not an important part of the market for Murray River Organics,” he said.
“It’s quite different to Bellamy’s in that it is a far more vertically integrated business, Bellamy’s is a branded business, which is more downstream and product focused.”
Analysts have valued the company at $35 million at $1.30 a share.
