24 billion Shanghai dairy industry leader, selling off New Zealand factory

Asking AI · How does selling a New Zealand factory help Bright Dairy turn losses into profits?

Author: Xie Zhiying Editor: Tan Lu Image source: Internet

Leading dairy company in Shanghai, selling overseas factories to “recoup” funds.

On April 3rd, Bright Dairy announced that its subsidiary, New Zealand NewLait, officially completed the transfer of its North Island assets in New Zealand and has received the related payments.

This cross-border transaction, valued at $170 million, approximately 1.21 billion RMB, was acquired by New Zealand Abbott.

By 2025, dragged down by losses from NewLait, this veteran dairy company with approximately 24 billion yuan in revenue reported a dismal performance, with a net loss of 149 million yuan, a decline of over 120%.

To return to growth and shed burdens, perhaps this is just the first step.

Replenishing Funds

In 2025, NewLait achieved revenue of 7.65 billion yuan, with a net loss of 407 million yuan.

The company explained that production issues at its manufacturing base led to inventory write-offs and increased costs, resulting in significant direct losses. It also stated that the related problems have been basically resolved.

However, the ongoing losses of NewLait have become Bright’s biggest burden.

In 2010, Bright Dairy invested in New Zealand NewLait to expand overseas milk sources. The latter mainly engaged in the production and sales of industrial milk powder, infant formula, cheese, and liquid milk. By the end of 2025, Bright held a 65.25% stake.

In 2021, NewLait experienced annual losses, though it briefly turned profitable later.

Since 2023, the situation worsened, with losses expanding from 296 million yuan to 407 million yuan last year, ultimately leading the parent company to report its first annual loss in 16 years.

“Last year, NewLait focused on core business development and began implementing strategic adjustments for its North Island operations,” Bright said.

The North Island assets sold to Abbott mainly include the Pokeno factory, as well as supporting RPD milk powder blending and packaging facilities, and Jerry Green raw material finished goods warehouses.

When the Pokeno factory was completed in 2020, it was touted as New Zealand’s “most advanced nutrition powder production base,” with an annual capacity of 40k tons. However, underutilization persisted and the issue remained unresolved.

Notably, Abbott, the acquirer, was already a customer of NewLait’s North Island assets, with some of its high-end nutritional products produced at the Pokeno plant.

Bright stated that this sale will bring sufficient cash flow to NewLait, used to repay debts and reduce interest costs, and is expected to increase NewLait’s profit for the 2026 fiscal year by approximately 39.3 million to 58.9 million RMB.

“Global dairy market volatility is intensifying, with rising costs and competitive pressures; overseas projects involve large initial investments and long return cycles, putting pressure on performance,” said Wu Zewei, a special commentator for the China Business Review, to 21CBR.

Heavy Pressures

In the domestic market, Bright’s performance is also weak.

In 2025, the company’s revenue was 40k yuan, a slight decrease of 1.58% year-on-year.

Its core liquid milk business saw a 6.65% decline in revenue. The gross margin of the dairy sector fell to -9.71%, falling into the dilemma of “selling more but losing more.”

Besides the drag from overseas subsidiaries, other factors also impacted performance.

At the end of March, Bright Dairy disclosed that it conducted comprehensive impairment tests on accounts receivable, inventories, fixed assets, goodwill, etc., as of the end of 2025, and recognized asset impairment provisions totaling 111.75 million yuan.

Additionally, its wholly owned subsidiary Bright Agriculture acquired a 50.5% stake in Shuangcheng Miteli Agricultural Development Co., Ltd., creating goodwill of 20.96 million yuan. The loss of this company continued to widen, and Bright fully recognized impairment losses on this goodwill.

By the end of 2025, Bright announced it would acquire the remaining 40% stake in Xiaoxi Niu for 500 million yuan, achieving 100% control.

This transaction triggered regulatory inquiries because Xiaoxi Niu failed to meet previous performance commitments and was already in loss before the acquisition.

Under heavy pressure, management’s compensation also declined.

Huang Liming

In 2025, Chairman Huang Liming’s salary was 1.3028 million yuan, a decrease of about 420k yuan from the previous year; General Manager Ben Min’s salary also dropped from 1.6397 million yuan in 2024 to 1.3028 million yuan.

For 2026, management set a relatively optimistic target, planning to achieve revenue of 23.9B yuan and a net profit of 313 million yuan.

This means Bright needs to turn losses into profits within a year and generate over 460 million yuan in profit growth, testing the management team’s capabilities.