I had a similar question a few days ago about what the rationale for a Chinese manufacturing site could be, because the initial rumour posted by the Australian was about potential acquisition in NZ or overseas (which I took to mean China). I think the subsequent rumour reported by NZ Businessdesk focused it on being in NZ.
In terms of how it would work, my guess is that there might be 2 benefits to a facility in China - 1) it might give more flexibility to respond to changes in demand, logistics issues etc. if they can ship the bulk milk powder over create the end product over there; and 2) it might be more favourable from a future SAMR registration perspective to have a Chinese located facility.
But, those benefits come with the quality and traceability risks you pointed out. Which is probably why they are more interested in NZ in the near term if the rumours are to be believed.
A2M Price at posting:
$6.29 Sentiment: Buy Disclosure: Held
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