Updates from Synlait (SML), not sure if anyone posted this before.
SYNLAIT CUSTOMERS Our aim is to work closely with leaders and innovative new companies in the infant formula industry to manufacture finished infant formula, infant grade nutritional powders, ingredient milk powders and nutraceuticals products. We are targeting our infant grade nutritional powders to multinational customers and are enjoying strong volume growth in finished infant formula products with our innovative customers, both of whom we work very closely with. This customer strategy is laying the foundation for the expected growth in nutritional sales and profit in FY16. Our leading infant formula customer is The a2 Milk Company™. The volume of packaged infant formula they are purchasing from us in FY16, along with further growth this financial year, will contribute significantly to total FY16 nutritional sales volumes. Their a2 Platinum® range of infant formula products are manufactured exclusively by us and we’re regularly in touch with The a2 Milk Company™ to continue strengthening our strategic relationship. Our commitment to U.S. based Munchkin Inc. to produce Grass Fed™ infant formula was announced in July 2015 and the first Grass Fed™ milk was successfully processed in late November 2015. Manufactured from milk exclusively produced from pasture-fed cows, Grass Fed™ is the latest Special Milk programme offered to our suppliers and is a direct response to consumer awareness of nutritional benefits from this type of milk.
INSIDE THE FARM GATE We’re continuing to grow our milk supplier base both in the number of suppliers as well as the proportion of differentiated milk our suppliers produce.
Differentiating milk inside the farm gate is how our suppliers create value for our products on farm. Our Special Milk programmes like a2 Milk™ and Grass Fed™ are good examples of this, as is our dairy farming best practice certification programme Lead With Pride™. At this time of year suppliers are busy finishing mating and coming out of their busiest period. Their focus is starting to turn to planning for the 2016/17 dairy season and it’s no coincidence our attention with suppliers at the moment is set on making sure we have enough total milk (including Special Milks) to meet our production targets in that season. The commissioning of D3 in September 2015 has increased our total production capacity from 90,000 MT to 140,000 MT per annum. Along with the additional demand for nutritional products from our customers, we launched a campaign to attract more milk suppliers in Canterbury to meet these needs. Called MILK. THE. OPPORTUNITY., it highlights why supplying Synlait is a smart choice. We have had a great response so far and are interested in talking to any dairy farmer in the region currently considering their milk supply in the 2016/17season. More information can be found at www.synlait.com.
An update from Dec 8 also suggested an increase driven by packed formula (mainly A2)
Dr Penno invited shareholders to focus on the volume of nutritional sales as a key performance indicator for Synlait in FY16. “Our total sales volume is set to grow from FY15’s 97,800 MT to 122,500 MT in FY16. More than half of that growth will be the result of increased nutritional sales in consumer packaged infant formula, which carries a significant benefit in terms of gross margin.” (24,700 MT growth and half should be 12,350 MT)
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