JAPFA is cutting its planned US$90 million investment in its China dairy business and reallocating the unutilised money for general purposes, the livestock and dairy company announced on Wednesday.
Japfa said it has used only US$46.57 million of proceeds from its 2014 initial public offering on its China dairy business, with another US$6.45 million expected to be spent on Dec 10.
The company said it does not expect to fully utilise the remaining US$36.98 of IPO proceeds that had been earmarked for China dairy. "In response to changes in the business environment", Japfa will now also use the remaining proceeds for investment, debt reduction, working capital and general corporate purposes.
The company has already decided to use US$10 million of those proceeds as working capital for wholly owned Annona, a procurement business for the company's feedmills.
"While the group continues to be committed to its China dairy business, this broadening will give the company the flexibility to tap on strategic investment opportunities in any of its core animal protein business, as well as in its China dairy business, as and when those opportunities arise," Japfa stated.