Fonterra to launch self-branded infant formula in China

Fonterra to launch self-branded infant formula in China

By Ding Yining | September 26, 2013, Thursday |  PRINT EDITION

The world’s largest dairy producer Fonterra will launch its self branded infant formula in China later this year, undeterred by a recent botulism scare, as it taps the huge demand for imported formula in the country. The launch would start around the end of this year, an official with Fonterra China confirmed with Shanghai Daily yesterday, although no other details were provided. Fonterra CEO Theo Spierings said its Anmum brand of infant milk formula will be available in 70 Chinese cities in two to three years, Reuters reported yesterday.“We reviewed our plans after the (botulism) crisis. We reviewed whether we should delay it, and we said ‘No,’ so it’s full steam ahead,” Spierings said, adding that he was stepping up Fonterra’s China expansion, prioritizing growth in its consumer brands and food services there over other regions.

“In China … we’re going faster. In other geographies, in India, we’ve put some plans on hold. In Africa, we are only stepping up things in a limited way,” he said.

Fonterra recently launched Anmum infant formula in south China’s Guangdong Province on a pilot basis on the company’s website, he said, adding that it would be available in Hong Kong later this year.

But Spierings said the roll-out for Beijing and Shanghai would be delayed as Fonterra had yet to develop a retail presence in the capital, and still had to assess whether it could take on fierce competition in Shanghai.

In pushing its own brand in China, Fonterra will be up against rivals such as Danone — a major customer whose brands command 9.2 percent of the Chinese market — and Mead Johnson.

The New Zealand company also plans to build an ultra-high temperature milk producing plant in China that is set to be operational by 2016 as it seeks to sell more processed products.

Sales of milk powder in China reached 75.2 billion yuan (US$12.3 billion) last year and are set to grow to 152.4 billion yuan by 2016, according to market researcher Euromonitor International.

Fonterra yesterday said China reported a 20 percent annual increase in earnings before interest and tax for the financial year ended on July 31.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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