(Yicai) Sept. 29 -- Bright Dairy & Food, a major Chinese dairy company, plans to sell some of its New Zealand assets to US pharmaceutical giant Abbott Laboratories for USD170 million as a result of underuse and to stem losses.

Bright Dairy’s subsidiary Synlait Milk, in which it has 39.1 percent stake, will sell its production site in Pokeno as well as a blending and canning facility and a warehouse in Auckland to Abbott’s local unit Abbott Nutrition NZ, the Shanghai-based firm announced yesterday. The deal is expected to complete by April 1, next year.

The Pokeno factory is a state-of-the-art nutrition powder production base with an annual capacity of 40,000 tons. It can turn out a variety of products ranging from high-grade industrial powders to nutritional infant formula. Together with the factory, the blending and canning facility and warehouse form a complete supply chain.

Synlait’s shares [NZE: SML] closed almost 16 percent higher at 81 New Zealand cents (47 US cents) each in Wellington today. In Shanghai, Bright Dairy [SHA: 600597] dipped 0.5 percent to CNY8.43 (USD1.18).

The deal should lift Synlait’s net profit for the fiscal year 2026 by about NZD10 million to NZD15 million (USD5.8 million to 8.7 million) and free up cash to bolster the balance sheet, enabling debt repayment, reducing future working capital borrowing, and materially cutting interest costs as operating pressures are eased, Bright Dairy said.

“The sale will strengthen the company’s financial position, with the proceeds used to significantly reduce debt,” Synlait said in its fiscal year 2025 financial statement released today. “We are equally pleased Abbott will onboard the vast majority of those who work across these sites at completion.”

Synlait’s net loss after tax shrank 78 percent to NZD39.8 million (USD23 million) in the year ended July 31, Chief Executive Richard Wyeth said on the firm’s earnings conference call. Revenue rose 12 percent to a record NZD1.8 billion (USD1.1 billion).

Editor: Futura Costaglione