Media Updates, page-8721

The growth of direct exports of infant formula from Lyttelton port (where Synlait is based) to China remain strong. The conventional thinking is that A2M products (likely China label) feature prominently in the IF exports from this port due to Synlait dominating its usage.

Here is the latest IF export data with the month of March 2021 added in.



March 2021 is a bit of a milestone, because it is one year since the the large spike in March 2020 due to COVID, which still punctuates this graph.

Subsequent months (April - Sept 2020) were much lower, consistent with the pause of MBS store rollout and pantry unwinding which both occurred in late FY20.

When A2's MBS store roll-out picked up again rapidly in 1H21, so did the trend in exports. Jan 21 saw a massive drop due to the almost total shutdown of Chinese ports during Lunar New Year, but there was a quick rebound in Feb 21 to much higher levels than usual for that time of year.

Exports declined in March 21 (compared both with Feb 2021 and with the huge spike in March 2020) but the trend is still strongly upwards.

To illustrate the point, the total gross weight of IF exports from Lyttelton to China in FY21 thus far has already exceeded that of FY20 by 10 percent, with still a whole three months remaining in the year.

On average, exports for each month of FY21 thus far has been double that of each month in FY20. Even if growth for the remaining 3 months of FY21 are lower than the average for the year so far - say 50% instead of 100% - it means that exports for the year will be approximately 60% higher than they were in FY20 (a year that included one of the largest export surges to date).

If they are completely flat compared to last year (a major divergence from the trend), growth in exports for the year would still be 40%.

While only one 'data point' amongst others, there is nothing in the export data to suggest that A2M's strong growth in MBS and China label isn't tracking according to plan.