A2Milk, NZ’s Synlait renew supply deal

Powder Milk And A Yellow SpoonA2 Milk Company has renewed an agreement for production of its branded infant formula by New Zealand dairy processor Synlait Milk.

The two companies have signed a five-year supply agreement, with production to remain at current volumes. Synlait will enjoy a right of first offer for certain additional volumes.

The two companies did not disclose the financial terms of the deal.

“We are very pleased to have concluded negotiations in relation to our supply relationship with Synlait. We’ve maintained appropriate flexibility to assess new product and market opportunities as they arise,” said Geoffrey Babidge, MD and CEO of a2MC.

John Penno, MD and CEO of Synlait said: “We commenced working with a2MC in 2010 to manufacture the world’s first infant formula made from milk exclusively containing the A2 beta-casein protein. Our businesses have grown significantly since then and this agreement deepens an already strong relationship.”

Both companies will continue to work closely to forecast demand and supply for a2 Platinum.

The contract also includes a steering committee structure to help the parties manage the contract and their business relationship.

“The new agreement is positive for both a2MC and Synlait as it clarifies our medium term manufacturing and supply arrangements for a2 Platinum infant nutrition products.” said Babidge.

“We’ve assessed our production commitments to all of our customers, including a2MC, and confirmed our ability to continue meeting all production needs into the foreseeable future,” said Penno.

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