I would say limited potential. I doubt D3 has been running at 90% capacity for the last 3 months as you assume in your calcs. When management advises that the plant has been running at near capacity I would say it is at 95-99% capacity. Hence why A2M management are looking to increase production capacity in Australia as a high priority.
Synlait are actively advertising for more A2 milk suppliers. Maybe A2 milk supply is limiting D3 from running at full capacity as opposed to near capacity.
Either way, production limitations will constrain further significant earnings growth from here imho. With a current forward pe of 68 ( based on the companies latest guidance), the market may start to consider that expensive until management can detail their production investment strategy and timelines. It will take at least 12 months lead time to commission a new plant or organise a new contract manufacturer with sufficient idle production capacity. MGC are planning to invest 300m in a new infant formula plant in Koroit Vic in 2016 if they can sign offtake partners. If A2M head down this path, it will still take well into 2017 before production commences.
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