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Fonterra to launch self-branded infant formula in China
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The world’s largest dairy producer Fonterra will launch its self branded infant formula in China later this year, undeterred by a recent botulism scare, as it taps the huge demand for imported formula in the country.
The launch would start around the end of this year, an official with Fonterra China confirmed with Shanghai Daily yesterday, although no other details were provided.
Fonterra CEO Theo Spierings said its Anmum brand of infant milk formula will be available in 70 Chinese cities in two to three years, Reuters reported yesterday.
“We reviewed our plans after the (botulism) crisis. We reviewed whether we should delay it, and we said ‘No,’ so it’s full steam ahead,” Spierings said, adding that he was stepping up Fonterra’s China expansion, prioritizing growth in its consumer brands and food services there over other regions.
“In China ... we’re going faster. In other geographies, in India, we’ve put some plans on hold. In Africa, we are only stepping up things in a limited way,” he said.
Fonterra recently launched Anmum infant formula in south China’s Guangdong Province on a pilot basis on the company’s website, he said, adding that it would be available in Hong Kong later this year.
But Spierings said the roll-out for Beijing and Shanghai would be delayed as Fonterra had yet to develop a retail presence in the capital, and still had to assess whether it could take on fierce competition in Shanghai.
In pushing its own brand in China, Fonterra will be up against rivals such as Danone — a major customer whose brands command 9.2 percent of the Chinese market — and Mead Johnson.
The New Zealand company also plans to build an ultra-high temperature milk producing plant in China that is set to be operational by 2016 as it seeks to sell more processed products.
Sales of milk powder in China reached 75.2 billion yuan (US$12.3 billion) last year and are set to grow to 152.4 billion yuan by 2016, according to market researcher Euromonitor International.
Fonterra yesterday said China reported a 20 percent annual increase in earnings before interest and tax for the financial year ended on July 31.
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