Chinese company reaches new supply agreement with New Zealand milk processor

WELLINGTON - Synlait Milk Limited, the New Zealand Exchange NZX-listed milk processor, announced on Wednesday a new supply agreement with China's New Hope Nutritionals for production of their infant formula brands.

The agreement secures a threefold increase from current volumes over the five-year period, said a Synlait statement. The New Zealand milk processor took a 25-percent stake in New Hope Nutritionals, located in southwest China's Sichuan Province.

The agreement will also underpin applications to register New Hope Nutritionals' Akara and e-Akara infant formula brands with the China Food and Drug Administration, it said.

"The agreed infant formula volumes with New Hope Nutritionals and our other customers will be met by blending and canning capacity at our Dunsandel site and eventually our new Auckland site," said John Penno, Synlait's Managing Director and CEO.

"This supply agreement has clarified our infant formula partnership with New Hope Nutritionals for the near future, allowing both of us to plan with confidence," Penno said.