Christopher Adams

The Business Herald’s markets and banking reporter.

New A2 infant formula ready for China

Getting ready to ship: Xu Jun, chairman China State Farms Holdings, and Geoff Babidge, managing director of A2 Corp.  Photo / Chris Miller
Getting ready to ship: Xu Jun, chairman China State Farms Holdings, and Geoff Babidge, managing director of A2 Corp. Photo / Chris Miller

NZX-listed alternative milk company A2 Corporation says the first consignment of its new infant formula brand will be shipped to the lucrative Chinese market next month, followed by distribution in New Zealand and Australian supermarkets soon after.

The company has appointed the China State Farms Holding Company Shanghai, a subsidiary of state-owned China National Agriculture Development Group Corp, as the exclusive Chinese distributor of its Platinum formula brand.

The formula will initially be sold in Beijing, Shanghai, Guangzhou, Tianjin and Chongqing before sales are progressively expanded to other major cities in mainland China, as well as Hong Kong and Macau, A2 says.

The company expects to be generating annual sales of $60 million in China by 2016.

In October, A2 announced a strategic agreement with Canterbury dairy processor Synlait Milk to manufacture A2-branded milk powders and infant formula at its facility in Dunsandel.

A2 sources its milk from cows that are selected to produce A2 beta-casein protein.

Managing director Geoffrey Babidge said A2 milk was more comparable to milk produced naturally by mothers than other beta-casein types.

The fallout from China's 2008 melamine scandal, in which several babies died after the toxic chemical was added to baby formula and milk powder, has driven a massive rise in demand for imported formula brands.

A2 shares closed at 57c on Friday.

- NZ Herald

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