Listed Canterbury milk processor Synlait is heading towards its first financial loss ever, but is telling its farmer suppliers not to worry.
Synlait says the arrangement will provide certainty of supply for both companies over five years.
New Hope Nutritionals is a joint venture between New Hope Group and Synlait Milk Ltd.
“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,” managing director John Penno says. “The agreement secures a threefold increase from current volumes over the five year period.”
He adds 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 (CFDA).
Synlait says its infant formula volumes with New Hope Nutritionals and other customers will be met by blending and canning capacity at the company’s Dunsandel site and eventually at its new Auckland plant.