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Production of Chinese labelled infant formula for a2MC will start in Synlait’s Dunsandel plant this month.
Troubled Canterbury milk processor Synlait has received a boost with Chinese authorities giving the company the green light to manufacture and export infant formula for the next four years.
The Chinese State Administration for Market Regulation (SAMR) has notified Synlait of the successful re-registration of a2 Milk Company's Chinese labelled infant formula (stages one, two and three) at its Dunsandel facility.
Synlait manufactures infant formula for a2, which is also a cornerstone stakeholder.
As the manufacturer of those products, the SAMR registration is held by Synlait and attached to its Dunsandel facility.
The re-registration is pivotal for the ongoing success of the manufacturing and supply agreement that Synlait and a2 have.
Synlait chief executive Grant Watson says they are thrilled to have achieved this milestone, which is pivotal to the success of its Advanced Nutrition business.
"Our shareholders, staff, customers, and farmer suppliers all benefit from the certainty of today's re-registration and continued China market access," he says.
"Synlait and a2 Milk Company have a longstanding and complementary partnership, and we look forward to continuing to support their China growth ambitions. The re-registration is a very important milestone and we have worked hard together to ensure its success. We thank SAMR and the Ministry for Primary Industries (MPI), for their support during this process."
Synlait, which issued a profit downgrade at the end of April, saw its share price nosedive. Last week, following news of SAMR registration, its share price rose 23/share.
In a statement, a2 says production is expected to commence later this month with product in market later this year.
a2 Milk Company managing director David Bortolussi says it looks forward to making upgraded China label IMF product available to parents in China.
"And building on the strong brand loyalty we have developed with Chinese families over the past decade as the pioneer and leader of the A2 protein category.
"The approval provides a2MC with continued access to China's substantial registered domestic infant milk formula market, which remains the key focus of our refreshed growth strategy."
Meanwhile a2 has announced that Bernard May, chief executive of its Mataura Valley Milk plant in Southland, is leaving after seven years with the company.
It says John Roberts has been appointed as interim general manager MVM to support a2's chief supply officer, Chopin Zhang, to accelerate the transformation of the company's supply chain.
"The focus will be on developing the company's infant milk formula (IMF) manufacturing capability and utilisation through in-sourcing certain nutritional products and prioritising new product development at MVM."
John Roberts brings significant IMF manufacturing development and operational experience in New Zealand and China to MVM, having held various leadership and consulting roles over his career at Yashili, Synlait Milk, Food Union, Nuchev, South Island Dairy and Westland.
"Bernard was behind the vision and creation of MVM and played an integral role in bringing this world-class asset to life with our strategic partner China Animal Husbandry Group (CAHG). On behalf of a2 and CAHG, we thank Bernard for his substantial contribution to the business and wish him well for the future," a2 says.
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