A2 need to invest in blending / canning at Mataura. They flagged this is something like a Nz$120m required investment. They said back in 2021 that they would invest this money in the next 2 - 3 years. Ie from 2021 - 2024/25. It may be worth noting they have been silent about this capoital expenditeu in hteir last 2 market report updaets. They have mentioned they are using a partner for canning. Some (like me may go - how odd not making this investment - have they something else in mind. Eg Synlaits canning / blending at Dunsandel.
Mataura is currently mainly a commodity milk powder manufacturer. However the plan was to shift to a mainly consumer packaged A2 products. They do need to shift their famer suppliers from A1/A2 protein milk to just A2 protein milk supply.
As I recall Matuara does not have capacity to produce all of A2's required tonnage.
If Synlait goes out of business a large amount of stainless steel milk processing infrastructure will remain at Dunsandel. Someone will buy this. Who knows at what price. There is also a reasonable number of local farmers who have converted their herds to A2 only protein milk. This means there is a milk availability. Whether these farmers supply Dunsandel (ex Synlait) or near by Clandeboye or Darfield plants (Fonterra) or Westland Milk (Yili) at Rolleston remains to be seen
A2M Price at posting:
$5.73 Sentiment: Buy Disclosure: Held
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