Synlait expands to meet China's US$15 billion formula demand
Company will spend $15 million to enable its Canterbury factory to produce more soluble infant powder.
Synlait Milk, which operates the largest purpose-built infant formula plant in the southern hemisphere, will spend $15 million to enable its factory to produce more soluble powder for China's expanding $US15 billion market.
This mean Canterbury-based Synlait will be able to better compete with Dutch-based FrieslandCampina, which operates the world's only other factory able to produce lactoferrin as a spray dried powder to pharmaceutical standards.
The market for lactoferrin has grown from 45,000kg in 2001 to 185,000kg in 2012 and is expected to hit 262,000kg by 2017.
"There is a global shortage of lactoferrin driven largely by the demand for infant formula," Synlait chief executive John Penno says in a statement. In China, infant formula sales are "growing by 15 percent with the addition of 18 milltion to 20 million new babies annually".
Synlait, which posted its first annual profit of $6.3 million in 2012, is 51 percent owned by the Chinese firm Bright Dairy, with the remainder held by the company's founders. It failed to attract investors in a proposed $150 million initial public offering in 2009.
The company is investing in the plant after demand from customers including YinQiao Xi'An, the largest dairy manufacturer in north western China, Mr Penno says.
Lactoferrin, which sells for $US500 to $US1000 a kilogram, is a bioactive protein extracted from milk and used in infant formula and adult nutritional powders. It is typically freeze dried and milled.
Synlait expects to produce 18 metric tonnes of the powder within four years, starting later this year or early in 2014. It currently produces 90,000 metric tonnes of value-added and nutritional powdered dairy products.
The company also expects to start building a packaging plant and warehouse before the start of the dairy season in August, it says.
(BusinessDesk)
Tina Morrison
Wed, 11 Jul 2018
Wed, 11 Jul 2018
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Synlait expands to meet China's US$15 billion formula demand
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