The supply agreement for a2 Platinum infant formula and other nutritional products made on August 23 2016 provided for a minimum term of five years with a rolling three-year term from August 1 this year.
The revised agreement extends the term by two-years, effectively providing for a new minimum term of five years to July 31 2023.
It increases the volume of infant formula products over which Synlait already has exclusive supply rights and provides increased committed production capacity from Synlait.
Pricing terms reflect the commitment on the part of both companies to an ongoing, market-competitive pricing regime.
The agreed variations are conditional on either NZX granting a waiver from the requirement to obtain shareholder approval or shareholder approval being obtained.
The agreement reinforces the two companies’ close working relationship as they work to develop a2 Platinum for the Australian, New Zealand and Chinese markets on an exclusive basis to a specified product volume, managing director and chief executive John Penno said.
“The success of the a2 Platinum product has exceeded all expectations over the past two years.
“This step is about bringing Synlait and The a2 Milk Company closer together in anticipation of continued growth.
“It also puts both companies in a great position to further leverage the Chinese Food and Drug Agency (CFDA) registration of a2’s infant formula products, which was achieved in September 2017,” he said.
