I reckon all this is more likely to result in a second,...

I reckon all this is more likely to result in a second, Australian based, contract producer than it is in an in-house facility build, it also put's Synlait under some pressure now in negotiating an increase in production with a2m at reasonable rates.

http://www.smh.com.au/business/a2-w...-cash-in-on-china-demand-20151110-gkv1bc.html

John Penno, CEO of Synlait, was heard to say just a couple of weeks ago "buyers (inc a2m) are talking about walking if they can't get a better deal from us, but they always say that".

The context being lower international dairy commodity prices and lower farm gate prices that are not presently being adequately passed onto customers like a2m. Noting that a2m gross margins although very high have remained stable while international dairy prices have dropped.