This report covers the period up to 31 January, Synlait had this to say in regard to capacity,
“Growth in our canned infant formula business is expected to push our infant formula production toward capacity over the next 12 months”
So full capacity should be expected in 2H16 or perhaps 1H17.
Even that is a little interpretable, but suggests that there is still a little head room remaining, and there is no reason to doubt the A2M FY16 guidance in that respect, in my opinion.
The question is more in regard to what happens within the FY17 year really, there may or may not be still a small amount of growth potential within the early part of FY17, and, without a second supplier it is probably IF sales would be flat or close to flat yoy at FY17 reporting.
I’m not sure that is what analysts presently have plugged into their spreadsheets, so there becomes an element of speculation now going forward, will A2M seek a second provider, or, just be content with present FY16 risk exposures to the grey market.
In regard to the percentage of A2M infant formula produced,
It’s not directly stated by Synlait, never has been so in my recollection in previous reports either, although you can garner a rough contribution by considering the geographic sales breakdown on page 9. Effectively, the green New Zealand region represents A2M as a customer.
Yes, I found it odd too that Akarola didn’t get much of a mention, given sales seem to have been going gangbusters on Tmall, it must be competing with a2 and munchkins in the race to full capacity.
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