Dongfang Modern Agriculture Holding is planning to raise up to $50 million through an initial public offering (IPO), and plans to list on the Australian Stock Exchange as DFM.
Dongfang produces and markets various fruits including tangerines, pomelos, and navel oranges, as well as camellia seed, camellia fruit, and related products in the Jiangxi Province of China.
The company plans to use the funds to expand through the acquisition of camellia orchards and related operations. China’s growing population and rising income level has resulted in a larger share of fruit in the population’s diet, and as Chinese consumers become increasingly health conscious, they are becoming more aware of the benefits of using camellia oil in cooking and as a salad dressing.
China’s fruit and vegetable juice processing industry is expected to produce 3 million tons, and its canned fruit and vegetable industry is expected to produce 2 million tons of product in 2015, for a total value of 300 billion yuan (US$64.6 billion).
The high rate of consolidation within China’s food industry, and the government’s policies and initiatives that support businesses in the food and agri-processing sectors through exemptions from income tax and VAT have created great opportunities for growth, and have given Dongfang the ability to reinvest nearly all of its earnings back into the business.
Donfang plans to use the capital gained from its planned IPO to grow its core business both in size and profitability, and to create related parallel businesses to capitalize upon the fragmented nature of the food industry in China.
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