Synlait recognised that while some farmers had exclusive A2 herds no processor in the South Island was producing products that rewarded their investment.
An example of this is Chris and Pauline Prattley of Killinchy, who converted their herd to A2 almost 10 years ago. Until now their A2 milk had been mixed with standard milk and was not differentiated in the market.
The Prattleys’ milk is now being manufactured by Synlait into A2 brand infant nutritional and milk powder at its facility in Rakaia.
The A2 brand infant nutritional powder will be distributed and sold by A2 Corporation, with a particular focus on the Chinese and South East Asian markets. A2 Corporation hopes the partnership will build into a US$50 million export business in the next three to four years.
A2 Corporation is buoyed by its success in the Australian market, where it has grown its liquid milk sales by 50% year on year.
To supply the programme Synlait suppliers must test their cows for the gene that causes animals to produce milk with the A2 milk protein. Most herds in New Zealand contain a mix of A1 and A2 beta-casein producing cows.
Production of A2-branded products began at Synlait in April with sample volumes and has grown quickly to commercial quantities today.
Synlait is seeking expressions of interest from its suppliers who want to supply the programme as the demand for the A2 brand product grows. Suppliers of A2 milk are rewarded with a premium above the normal milk price.
The agreement with A2 Corporation is just one example of the high-value special milk powders manufactured by Synlait that reward farmers for producing the type of milk demanded by the market. Other programmes include night milk and specialty colostrum products.
In 2012 Synlait marked its fourth year of operation and posted a net profit of $6.3 million. The company grew its supply base to 150 farms and its milk volume to 498 million litres.
This was processed into 81,398 metric tonnes of high-value nutritional powder.
