As Youfoodz (ASX: YFZ) shareholders prepare to vote on whether to cut their losses and sell to German multinational Hellofresh, the company has struck a deal with Sydney-based LOGOS Property Group to build a best-in-class production facility in Southeast Queensland.
The planned facility was a key part of the Brisbane-based food company's initial public offering (IPO) in late 2020 with $15 million of the $70 million raised slated for investment in plant and equipment at the site.
This morning Youfoodz announced it had reached an agreement for LOGOS to construct the 13,700sqm facility in Berrinba, Logan Shire, followed by a long-term lease under which the property company will be Youfoodz' landlord.
Construction is due to commence in the last quarter of this calendar year and a practical completion is forecast for the September quarter next year. The lease will then begin and Youfoodz will start transitioning from its existing three Brisbane-based locations to the new consolidated, custom-built facility.
Upon completion Youfoodz will be able to increase its weekly production capacity from the current 420,000-meal limit to 800,000, rising to 1.5 million weekly over time.
An estimated 350 jobs will be generated in construction, and after completion, Youfoodz plans to create 140 new roles once weekly production hits the one million meals mark.
The company expects flow-on benefits to local farmers, who provide 90 per cent of ingredients, as raw material tonnage rises from 160 tonnes processed per week now to 350 tonnes in the future.
"This is a significant project in the evolution of Youfoodz, which is expected to deliver considerable benefits to the company, our employees, customers and suppliers," says Youfoodz founder and CEO Lance Giles.
"Once commissioned, the new facility will materially increase our capacity for growth, improve efficiency, deliver world-class food and employee safety, and achieve improved energy efficiency and environmental sustainability through a modern purpose-built design.
"And in bringing all our Brisbane based employees under one roof, we expect significant employee culture and collaboration benefits."
LOGOS’ head of Australia & New Zealand, Darren Searle, says the property group is delighted to be partnering with Youfoodz on this important project.
"LOGOS has a strong track record in developing world-class food and logistics facilities in Australia, New Zealand and across Asia and is looking forward to delivering this new purpose-built facility for Youfoodz," Searle says.
Brisbane Lord Mayor Adrian Schrinner says the Brisbane Economic Development Agency (BEDA) worked alongside Youfoodz management to help the business with site options and to navigate the development approval processes.
"By working with Youfoodz, we’ve helped this great business expand and we’re eager to work with other businesses to mirror this success, which will help Brisbane recover and create jobs," Schrinner says.
"Youfoodz’ new facility is evidence that even in these challenging economic times, there’s opportunity for expansion with the right support."
The news comes just weeks out from a planned shareholder scheme meeting on 8 October, when shareholders will decide whether to sell Youfoodz to Berlin-based Hellofresh for $0.93 per share.
This represents a 38 per cent discount to Youfoodz' listing price of $1.50, but follows a sharp drop in the company's market capitalisation as the newly-listed group fell well short of earnings forecasts.
When the planned Hellofresh buyout was announced in July, Youfoodz' majority shareholder RGT Capital - which holds 57.4 per cent of shares - indicated its intention to vote in favour of the scheme, subject to the absence of a superior offer and an independent expert determining it is in the best interest of shareholders.
The expert assessment was conducted by Grant Thornton Corporate Finance Pty Ltd and included in a scheme booklet sent to shareholders earlier this month, concluding the scheme is fair and reasonable and therefore in the best interests of Youfoodz shareholders.
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