Alterra Ltd (ASX:1AG) is the new name and code for the previously known Carbon Conscious Ltd (ASX:CCF).
Shareholders approved the name change at the AGM at the end of February 2016, with ASIC recording the change of name on 17 March 2016.
The company said it is awaiting confirmation from the ASX in relation to the effective date for the name change and new ASX code.
Western Australia's newest dairy market player
Earlier in the year, the company transitioned to be Western Australia's newest dairy market player.
Under the proposed strategy, the company will execute long-term offtake agreements with local milk processors that will pay a farm gate price to Alterra for milk supplied.
This is expected to lock in an attractive and consistent return.
Green Lake - the local export group associated with the company's Chinese partners - will continue to purchase milk from the processors for export to China and rebate a profit share back to Alterra on all exported milk.
Green Lake holds an import license and credentials to import fresh milk into China and has successfully started using the Brownes label.
This plan is expected to benefit from a number of converging trends on a state, regional and global level.
Factors driving milk demand
Western Australia imports half of its dairy requirements including cheese and yogurt.
This will continue to tighten as the state population grows from 2.6 million to 3.6 million in 2030 and more demand from Asian export markets grows.
The increasing disposable wealth from a growing middle class in Asia (from 600 million to 3 billion in the next 35 years) is a major factor underpinning the company’s long term business model.
China alone is expected to chart an increase in dairy consumption from 46 billion litres in 2012 to 74 billion litres in 2030 – the increase being the size of the entire Australian and New Zealand production.
Australian fresh milk currently retails in a range of A$8-10 per litre in China, where farming issues related to arable land, water and access to feed impact the local industry.
The company is well-funded after selling its New Zealand assets earlier in the month for around A$3.3 million.
Our initiating coverage calculates a price target of $0.21 a share.
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