Tuesday, November 10, 2015

Yashili's new factory a milestone for the infant formula company

Yashili New Zealand's new infant formula plant is a milestone for the company's globalisation strategy.

The $220 million plant at Pokeno in North Waikato was officially opened with much fanfare on November 6 at a ceremony at the factory attended by government and company representatives from both New Zealand and China.

Yashili New Zealand general manager and director William Zhao said it was "hard to describe" the feeling after Yashili New Zealand had developed from small beginnings into the company it was now.

It was the company's first overseas plant and Zhao said they searched all over New Zealand before choosing Pokeno because of its geography, location and excellent dairy farming facilities.

The 30,000m2 plant will employ 85 staff and have an annual production capacity of about 52,000 tonnes of formula product. It will produce formula under the brand 'Super Alpha-Golden Stage Infant Formula' with shipments to China expected to begin in early 2016.

Yashili New Zealand is a leading producer of infant milk formula for the domestic market in China and has bought milk powder from New Zealand for more than 10 years and had used this country's milk powder in its infant milk formula since 2010. The establishment of Yashili New Zealand begun a new chapter of Chinese offshore infrastructure development, China Mengniu Dairy Co and chairman of Yashili International Holdings Sun Yiping said.

New Zealand was a good choice for the company and Yiping hinted the company may look to build more factories in the future.

"Globalisation is one of our key strategies to help Mengnui transform from a very traditional dairy provider to be a more multinational company. I think New Zealand is a very good start and this plant will give us an opportunity and maybe in the future [we will have] more production facilities not only for infant formula but also UHT milk."

Yiping said the recent removal of China's one child policy was great news for Yashili.

"We will become a brand that knows Chinese mums best," she said.

Yiping said Chinese consumers highly valued New Zealand products, which was why they moved to set up a production facility in this country.

The opening was also the scene for the signing of a new global strategic cooperation agreement between Yashili International and European dairy producers Arla and Danone.

The agreement will see the three companies work closer together in supplying products into Arla and Danone's markets.

"It is a significant agreement between these two great dairy producers who are each committed to the highest standard of food quality and safety," Yashili International Holdings president Lu Mingfang said.

Yashili New Zealand is a subsidiary of Yashili International Holdings Ltd and Mengniu Dairy Co and was founded in 2012. The three companies have a history of collaboration with Danone acquiring 25 per cent of Yashili last year while Arla Foods has a joint venture company with Mengniu Dairy Co called Arla Mengniu.

Mingfang described the agreement as an "eco-system project" where the Pokeno plant can be into its global sourcing strategy.

"Today we have entered into a preliminary agreement with Danone to provide... supply into Danone and at the same time we are also working with Arla on the same thing on the upstream and we are going to work together."

He said it would ensure sure their products were up to the standard they wanted and it would set the similar global standard and allow them to supply the product to their partners.

China's ambassador to New Zealand Wang Lutong said the project had grown from a back shop of a handful of people to a beautiful plant and he thanked the New Zealand Government for assisting with the factory's construction.

"New Zealand is one of the most important and attractive destinations for Chinese investment and it has the greatest potential. The plant here is today is our commitment to New Zealand."

Prime Minister John Key said the plant was a great vote of confidence in the New Zealand dairy sector.

China had made a significant investment in New Zealand and it marked "an incredibly important day in relations between China and New Zealand", Key said.

"I'm certainly very optimistic about the relationship between New Zealand and China. I think it will go from strength to strength."

Key said the two countries had set a target of $30 billion in trade between the two countries by 2020.

Yashili will buy milk powder off Fonterra this season before putting the supply agreement out to tender. It can process both milk powder and liquid milk into infant formula.

The production plant was designed to operate under strict quality controls with food safety a top priority. It uses the latest technology with temperature and humidity to be controlled around the clock, guaranteeing stable production and ensuring reliable product quality.

Yashili New Zealand canning and brand manager Rob Bott said the Chinese had given them the best of everything with the technology and facilities on offer. The factory has the facilities to process both milk powder and liquid milk into formula and can choose which to use based on its cost.

He said they were working with a number of companies in the future to supply their milk.

"We'll take it from anyone as long as it's from New Zealand."

The factory can process two cans of formula a second and each can carries a bar code allowing it to be traced back to the date it was processed and where each ingredient came from.

It is totally automated with staff on hand to monitor and record each batch of formula. The empty cans are sterilised using a UV system before the formula is placed in the cans by machines in its 'high care' area and sealed. The cans then travel along the automated line to the lower hygiene area for packing.

About half of the formula produced at the factory is 'base' infant formula powder that is packed into 25kg bags. The factory can produce eight tonnes of bagged formula every hour, producing a 1.4 tonne pallet every 15 minutes.

Once the factory is fully up and running, about 80 per cent of the product will be put directly into cans and 20 per cent into bags.

It is either sent to the canning line where heat-sensitive vitamins and minerals are added to the powder or is exported as a bag to be canned by Mengniu in China

See the full article here.