Sea Forest signs 480,000 head distribution deal with Teys Australia
Sea Forest Limited (ASX:SEA) has signed a distribution agreement with Teys Australia Trading Pty Ltd (Teys Australia), one of Australia’s leading beef processors and exporters, targeting at least 480,000 head of cattle by 30 June 2027. The agreement covers SeaFeed™, the company’s methane-reducing feed product.
The deal lifts the total number of cattle under agreement from 131,000 to 541,000 head, inclusive of the existing 70,000 head on feed already contracted with Teys Australia.
Teys Australia has trialled SeaFeed™ within its feedlots over the past 12 months. It will be the exclusive distributor of SeaFeed™ for the beef industry in Australia and New Zealand, subject to achieving certain purchase volume targets.
For investors, the announcement describes a move from trial use to a distribution agreement with a major beef processor.
Sam Elsom, Managing Director and Chief Executive Officer
“This is a transformational commercial milestone for Sea Forest and a step change in accelerating industry-led adoption of methane reduction technology for the Australian agricultural sector.”
When big ASX news breaks, our subscribers know first
Key commercial terms of the Teys Australia agreement
The announcement sets out the main terms of the agreement, summarised below. Specific purchase volume targets for exclusivity and pricing figures were not disclosed.
| Term | Detail | Why it matters |
|---|---|---|
| Term | Initial term until 30 August 2030, with options to extend by mutual agreement | Sets the period for the distribution relationship |
| Use in Teys Australia feedlots | Continued use across the Jindalee, Charlton and Condamine feedlots at no less than the recommended dosage, expected to represent approximately 70,000 head at full utilisation. Subject to operational, animal welfare and product-availability requirements and agreement on price | Underpins the existing contracted volume |
| Volume targets | The parties will work in good faith and use reasonable endeavours to achieve a target of at least 480,000 head on feed by 30 June 2027, including usage by Teys Australia and its customer network | A joint ambition rather than a guaranteed purchase commitment |
| Distribution rights | Teys Australia is the exclusive distributor of SeaFeed™ (including its future enhancements) in Australia and New Zealand (and other territories that may be agreed) for the beef industry target market. It must achieve certain purchase volume targets (including within its customer network) to maintain exclusivity | Exclusivity depends on volume performance |
| Preferential pricing | From the date exclusive rights cease, Teys Australia will be treated as preferred distributor, with the benefit of lowest pricing provided to other Sea Forest customers, adjusted for differences in transport costs | Preserves pricing terms after exclusivity ends |
| Pricing generally | Determined by agreement on an ongoing basis, subject to parameters for the price to be commercially viable for both parties | Price is not fixed in the announcement |
The announcement also outlines the following termination provisions:
- Standard termination rights apply for matters such as unremedied breach or insolvency of the other party.
- Teys Australia may terminate on 90 days’ notice without cause.
How methane-reducing feed additives work for beef producers
Ruminant livestock, such as cattle, produce methane. Sea Forest’s SeaFeed™ is described as a nature-identical formulation of the bioactive compounds of Asparagopsis, a methane-abating seaweed.
According to the company, SeaFeed™ is proven to reduce methane emissions in ruminant livestock by up to 80%. The claim references a 2024 study published in the Journal of Animal Science.
Distribution matters because a feed additive needs a route to producers. Teys Australia’s operations span livestock supply, processing, value-added products and distribution, and the agreement includes usage within its customer network.
Sea Forest has three Australian sites across Tasmania and New South Wales, and is B-Corp certified.
What the deal means for investors
The number of cattle under agreement rises from 131,000 to 541,000 head. That figure includes the 480,000 head target, which is subject to the parties’ good faith and reasonable endeavours rather than a guaranteed purchase commitment.
The earlier Avondale Ag agreement, an exclusive 12-month SeaFeed™ contract covering 5,000 head in Rowena, NSW, shows the farm-level contract structure that sits beneath the larger distribution model now agreed with Teys Australia.
The agreement follows a 12-month trial. Teys Australia was founded in 1946, operates from 14 locations across Australia and exports Australian beef to more than 60 countries.
Mr Elsom pointed to the combination of the following elements in supporting adoption at scale:
- Distribution capability
- Customer relationships
- Operational know-how
- Carbon market opportunities
Grant Garey, General Manager Feedlots, Teys Australia
“…Formalising this distribution agreement lets us help make SeaFeed™ available to a larger part of the supply chain, giving producers a practical option to consider as part of their own sustainability efforts…”
Several points remain to be watched. These include progress toward the 30 June 2027 target, the purchase volume thresholds tied to exclusivity, and agreement on price. The announcement does not quantify the revenue impact of the agreement.
Don’t Miss the Next Consumer Staples Breakout
Get FREE breaking ASX news delivered to your inbox within minutes of release, complete with in-depth analysis and the full announcement. Join 20,000+ investors already staying ahead of the market. Click the “Free Alerts” button at Big News Blast to receive consumer sector alerts the moment news breaks.