China Only, No US expansion, page-9

Relatively speaking, the US expansion is costing bugger all. They can afford it. The milk they are using for the US market is sourced from the US. They have enough resource to do both US and China - both cash and staff. With Fonterra onboard they will have enough milk to make a real dent in China. Fonterra can provide milk powder for all other products into China except IF. If Synlait can't keep up with demand for IF production then Fonterra can be used for AUS/NZ label IF and leave Synlait with CFDA approved China label product only. A2M can do this under the current arrangement if Synlait can't keep up. They aren't locked into Synlait if Synlait can't keep pace with heir orders. In four years time they can cut Synlait out altogether, although this is unlikely give they own a chunk of them and won't want to be reliant only on Fonterra. Nor is that A2m's style.

Remember up until today they have never had a capacity problem. The stock shortages have always been orchestrated by the company. They aim to have IF slightly hard to get. By their own admission they have been a little to conservative but they definitely don't want to flood the market.

They have first mover advantage. I want them to make full use of it.