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Aussie dairy giant to ramp up infant formula production to satisfy Asian demand

Xinhua, March 15, 2016 Adjust font size:

An Australian milk giant has unveiled its plan to build a new factory in regional Victoria as it aims to capitalize on the growing demand for baby-milk formula in China, and other parts of Asia.

On Tuesday, Murray Goulburn (MG) announced it would ramp up production of its specially formulated infant milk powder after signing distribution agreements with suppliers from the United States and Indonesia.

Gary Helou, managing director of MG, said most of the company's brand of formula - Devondale Natra Start - would make its way to China, where the market for quality milk products continued to soar.

"Devondale Natra Start infant formula will provide a world-class, Australian product to our consumers, 100 percent controlled by MG from farm gate to shelf," Helou said in a statement on Tuesday.

"We expect there will be strong consumer support for Devondale Natra Start, particularly in China, where Devondale is already a trusted milk powders brand."

Under the framework, the company plans to invest up to 225 million U.S. dollars in the new drying plant, which will be built about 300 kilometers west of Melbourne.

The facility will more than triple MG's annual yield - from 18,000 tonnes to 63,000 tonnes - once it becomes operational in 2019.

Murray Goulburn also indicated it would look into building another massive unit of the same size - 45,000 tonnes - if the company was still unable to meet international demand.

As part of the deal, an on-site packaging plant - run by the maker of Enfamil, Mead Johnson Nutrition - will also be constructed, allowing the powdered-milk products to be swiftly sent out across the Asia Pacific region.

"We look forward to developing the relationship further in the future for the benefit of consumers across the Asia Pacific region," Mead Johnson Nutrition chief executive Kasper Jakobsen said on Tuesday.

Murray Goulburn is Australia's largest dairy company with 2,600 farmer-owners. It joined the local stock exchange in a partial float last year, via its MG Unit Trust, after raising 335 million U.S. dollars from investors.

MG traded slightly higher on Tuesday following the announcement. Endit