Partners in the dairy products market, The a2 Milk Company [ASX:A2M] and Synlait Milk [ASX:SM1], have joint-announced that they have won approval to re-register their shared Chinese label for Infant Formula, as given by Chinese authorities.
With concerns over the stock’s Chinese market opportunities now dissolved, both dairy stocks went up in the share market today.
A2M was bumped up by nearly 4% by the early afternoon on Tuesday, trading at $5.54 piece. Where else, SM1 rocketed by 12.5% in share value, trading for $1.67 for each share:
Source: TradingView
Dairy partners a2 and Synlait push ahead with Chinese approval
a2 Milk and its NZ partner, Synlait Milk, have both announced that they have received the long-awaited and highly anticipated approval from Chinese authorities to re-register their China level of infant milk formula, which can now officially be manufactured in line with China’s new regulations.
China’s State Administration for Market Regulation (SAMR) has been given the green light by going ahead with approval for a2 Milk’s formula stages one, two and three.
With the groups now able to develop a product that is officially in line with China’s new standards, this decision will now see Synlait returning to manufacturing the products for a2 Milk. These products will be available for export to the Chinese market until the deadline of September 2027.
As SM1 is the manufacturer of those products, the SAMR registration is technically held by Synlait and is attached to its Dunsandel facility.
This re-registration is pivotal for the ongoing success of the manufacturing and supply agreement that Synlait and the a2 Milk company have. It also dispels any budding concerns that may have been circulating over the issue both for the companies and for their investors.
Production is expected to commence later this month with product transitioning with the market during the first half of FY2024.
Synlait CEO, Grant Watson stated:
‘We are thrilled to have achieved this significant milestone, which is pivotal to the long-term success of our Advanced Nutrition business. Our shareholders, staff, customers, and farmer suppliers all benefit from the certainty of today’s re-registration and continued China market access.
‘Synlait and The a2 Milk Company have a long-standing and complementary partnership, and we look forward to continuing to support their China growth ambitions. The re-registration is a very important milestone and we have worked hard together to ensure its success. We thank SAMR and the Ministry for Primary Industries, for their support during this process.’
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For Money Morning
