Synlait Powder Capacity, page-17

Ok I will make this thread again for bit more east reading.


"Synlait makes all of a2's infant formula at a factory that has capacity to produce 30,000 tonnes a year – close to Australia's total infant formula production of 30,000 to 40,000 tonnes a year."
From SML

http://m.smh.com.au/business/a2s-infant-formula-sales-surge-330-in-four-months-20151116-gl0o60.html



Lets say A2 has 50% of total of  30,000tons
Of SML capacity.(SML is pushing production for A2 now)

A2 platinum: 15,000tons
15,000,000litre × 1 litre (lets say 1 kg per tin)
=15,000,000 tins

15M tins × $25 retail price = $375M

Margin 60%
= $225M a year

So 50% of Synlait capacity for A2 maximum operation revenue is $225M

Forecast of FY16 $350M of 50% is infant formula,
So they expect of $175M formula sales for FY16.

That means they can only create extra $50M for using full 50% of SML capacity.

In order to meet strong demand of A2 platinum, SML must increase its capacity to 50%+

SML have announced they will increase formula production ×4
I think this is mainly for A2.

Ok then,

Its good to know that SML can increase production to 50%+ for A2 means A2 can create around $400M of A2 platinum from SML.

A2's other products revenue is $175M + $400M = $ 575M + ( other products sales increase)

Roughly
If A2 platinum demand is keep growing,
I think they will update revenue forecast from $350M to $400M for FY16.
(Because Jan, Feb formula sales increased by SML boosted production from middle Dec 2015.)

I think FY17 revenue will be around
$500M to $550M+

Good to do the numbers again for my investment^^