16 Apr 2012

A2 and Synlait in milk processing deal

1:01 pm on 16 April 2012

Specialty milk provider A2 Corporation is a step closer to supplying infant formula to fast growing Asian markets.

The listed company has done a deal with Synlait Milk which will process A2 milk and turn it into powders.

Under the agreement, Synlait will use A2 milk from accredited Canterbury dairy farms and manufacture the nutritional powders at its facility in Rakaia.

A2 says the agreement is an important step in the company's plans to launch its products in Asia, particularly China, where the retail market is estimated to be worth $US6 billion and is forecast to grow at an average 12% a year over the next decade.

The company says it will now start talks with potential partners to distribute and market its powders and infant formulas.

The listed firm more than tripled its half year profit to $3.1 million due to strong sales of fresh milk in Australia.

A2's share price has more than doubled since the beginning of the year.