Korean company Maeil Dairies will purchase land and assets from Corio Bay Dairy Group for $13.5 million, after the company went into voluntary administration in August last year.
Corio Bay Dairy Group was a joint venture company between Wattle Health Australia and Organic Dairy Farmers of Australia. Wattle Health CEO and managing director, who was also CEO of the joint venture, Dr Tony McKenna resigned from Wattle in November 2020. He has been named CEO of Maeil’s wholly owned subsidiary Maeil Dairies Australia.
In 2018, Wattle Health raised $54 million to acquire a 45 per cent stake in the JV. Wattle sells the Uganic baby formula brand. The JV was building an organic dairy spray-drying milk powder plant in Geelong until voluntary administration.
Organic Dairy Farmers of Australia – which was going to supply the milk – went into voluntary administration in May 2020 with more than $11 million in debts. It was acquired by The Remarkable Milk Company in August last year.
Wattle recorded a $59 million annual loss in FY20 after major write-downs, largely due to the collapse of Corrio. It had invested $44 million in the organic milk powder processing plant. It announced $21.3 million in impairments on its Corio investment.
Media reports say unsecured contractors were left $12 million out of pocket. McKenna said Wattle Health was the only secured creditor, but he believed there would be strong interest from potential buyers. In September 2020, he told The Australian Financial Review, "finding a new partner could be a good way forward".
On 14 January, McKenna told The Geelong Advertiser negotiations were underway with local contractors who had been working on the project. He hoped up to 150 workers would be back on site by mid-February.