Infant formula manufacturer The A2 Milk Company has announced that it has extended its supply agreement with Synlait Milk, as part of its 2MC’s global supply strategy.
The agreement, for the supply of a2 Platinum infant formula as well as other nutritional products, was originally signed in 2016.
A ‘significant extension’ was made to the deal in July 2018, providing a new minimum five-year term that extended the agreement to at least the end of July 2023.
According to the reaffirmed partnership, the production agreement has been extended by another two years, effectively providing for a new minimum term to, at the earliest, 31 July 2025.
As part of the reinforced agreement, New Zealand milk processing company Synlait will increase its committed production capacity and the volume of nutritional products in which it has the exclusive rights to supply.
The new deal will include renegotiations over pricing terms that reflect the commitment on the part of both companies to an ongoing market-competitive pricing regime.
Synlait Milk CEO Leon Clement said: “Our long-term partnership is a key part of what has made Synlait and The A2 Milk Company successful.
“Infant nutrition is a core focus for both companies as we continue to invest in our future; building capacity and capability to support our respective growth stories. We are pleased to be able to update the market on an extension to our supply agreement.”
In its annual meeting, A2 anticipates continued strong revenue growth across its key regions supported by brand and marketing investment in China and the US. It expects full year EBITDA margin to be in the range of 29-30%.
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