May/June 2014
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Central Otago Focus 12-page lift-out
A2 milk making inroads offshore Hugh de Lacy Getting fresh milk into China from Australia and New Zealand by air is on the a2 Milk Company’s horizon as it brushes off an apparently failed attempt by a global dairy giant Parmalat to kneecap its growth in Australia. Formerly the A2 Corporation, listed a2 Milk Company has carved out a 10% share in dollar terms of the Australian fresh milk market at the expense of, among others, the Italian-based multinational Parmalat. Parmalat recently hired Australian public relations company Crosby Textor to plant stories in the Australian media aimed at undermining the as-yet-unproven science behind A2 milk. The plot appears to have backfired with media on both sides of the Tasman not only rejecting Crosby Textor’s
overtures to carry anti-A2 items, but reporting them as such. Australia has been the major success story for a2 Milk which supplies fresh milk to the United Kingdom and Australasian markets, and infant formula to China. The company is in the advanced stages of planning a sally into the United States fresh milk market using locally sourced supplies of milk which are free of the A1 beta-casein protein that A2 buyers believe cause digestive problems in many users of standard A1 milk. Chief executive Geoff Babidge said he had been aware for some time “that there’s been activity in the[Australian] marketplace by at least one competitor”. “One looks at that with interest,” he said. “Our position is that all dairy is good for the dairy industry.
“It’s a little surprising that a competitor would be putting effort in in that particular way – we don’t see it as particularly constructive to the dairy industry in total.” Otherwise, he said, the company was unfazed by the failed media campaign which Parmalat appears to have launched to stop the erosion in sales of its long-running Pauls fresh milk brand that it believes a2 is causing. Launched in 2007, a2 is now the only milk product to rate among the top ten items sold by Australia’s leading Woolworths and Coles supermarket chains. In the UK, a2 has recently revamped its existing joint-venture partnership with grocery giant Robt Wiseman, bringing aboard as distributors leading supermarkets Tesco and Waitrose, mid-level Morrisons, and on-line company Ocado. The US is the next major market a2 plans to
tackle, and after that it will be looking at marketing fresh milk into China where it already sells a branded infant formula manufactured in Canterbury by Synlait Milk. “We’ve had approaches by [Chinese] parties about the opportunity for both UHT long-life and fresh milk from Australia and New Zealand,” Babidge said. Bulk liquid milk was already being transported by sea for re-packaging in China, and there were possibilities for it to be air-freighted. “This is able to be done based on the price points that consumers are prepared to pay for milk from Australia or New Zealand,” he said. Aside from the impending launch into the US, however, the company’s main focus was on continuing to expand the Australian market share, while developing the UK market from a small business into a large one.
Big truck use on the rise More and more of the longer, heavier 50MAX trucks are appearing on New Zealand roads as a $45 million nationwide bridge strengthening programme clears the way for them. 50MAX trucks accounted for around 500 of the total of 4150 permits to use the country’s roading network that were issued by the NZ Transport Agency (NZTA) last year for High Productivity Motor Vehicles (HPMVs). Depending on the size and weight of the vehicle, along with the suitability of the route, these permits are either for specific routes, general network access or the HPMV network, which is being developed through the bridge strengthening programme. The 50MAXs are a new generation of truck, having an extra axle compared to standard 44 tonne vehicle combinations, and operators can apply online for permits to use them on specific routes. The strengthening of no fewer than 29 bridges on each island through the HPMV investment programme is opening access across almost the entire highway system. The investment programme, to be completed by 2016, aims to deliver a strategic nationwide network of 4500km of roads suitable for full HPMVs, allowing more freight to be moved with fewer trucks, according to the Transport Agency’s freight portfolio director, Harry Wilson. The aim is also to further enhance road safety, on the principle that fewer trucks on the road will mean fewer accidents, Wilson said. With about 70% of all freight in New Zealand – as assessed by weight and distance moved consigned by road, the Government hopes that the uptake of HPMVs will reduce the total number of truck trips by between 14% and 20%.
INSIDE
Synlait expanding at Dunsandel..... New Zealand dairy company Synlait Milk is investing $200 million in capital projects at its Dunsandel plant in Canterbury. A new lactoferrin manufacturing plant, 22,500sqm capacity dry store, and a blending and canning facility will all be operational by June, with plans already underway for a new full-service quality testing laboratory, administration
New crane for Lyttelton Port - PAGE 2
Boom times for Selwyn - PAGE 3
block, and a large scale infant formula spray drying plant. Neil Betteridge, general manager manufacturing, says that the developments cement Synlait’s reputation as a premium infant formula and nutritional milk powder manufacturer, with facilities that will take the company well into the future. Story page 5
Tax and the Budget - PAGE 4
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