A2, Synlait agrees to extend the infant feeding offer

Dairy Producer A2 Synlait Milk, Dairy and Dairy, has agreed to increase its supply of infant formula and increase the volume of formula that Synlait will provide while both continue to concentrate on sales on the lucrative Chinese market. signed a supply agreement in 2012 to support the plans of the milk marketing company to launch infant formula sales in China, and signed a new contract in August 2016 providing for an increase in scale if the Market demand warranted it

At least five years from 2016, with a term of three years from August this year, but extended by two years and will last until at least July 2023 Synlait will increase the volume of infant formula, exclusive supplier of A2 for and increase its committed production capacity.

They also agreed on price conditions "that reflect the commitment of both companies to a competitive price regime in the market," said each company's statement to the NZX . However, companies require shareholder approval for NZX changes or waiver of the requirement to obtain shareholder approval.

A2 stated that the extension was consistent with the overall strategic sourcing strategy that he developed, while Synlait said that the agreement reinforces the close working relationship between both "as they work to develop A2 Platinum for ANZ markets and in China on an exclusive"

"This step aims to bring Synlait and A2 Milk Co. together in anticipation of continued growth," said John Penno, Managing Director of Synlait, A2 General Manager, Geoffrey Babidge, said the agreement had been carefully crafted to ensure the company's safety in nutritional products.

Provide our Key markets in line with our overall strategic goal of maintaining a high quality supply with continued cost competitiveness. "

A2 shares traded at $ 11.43, up from e 42% this year, while Synlait's was at $ 11.39, up 58%.

(BusinessDesk)

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