Australia-China trade specialist Jatenergy Ltd (JAT) has tied up with Hipac, China’s largest business-to-business platform for mother and baby care products, to grow exports – including fortified powdered formula milk in cans – into the People’s Republic.
The news emerged as JAT released its first quarter results on 30 April, which showed a monthly revenue for February of A$8.5m (US$5.53m) and $8.1m ($5.27m) for March, driven by increased demand for the company’s Neurio milk powder with lactoferrin, which is aimed at infants as well as older people.
Rising demand for Neurio was attributed to health concerns associated with the coronavirus pandemic, since lactoferrin is a protein that is claimed to help in modulating the body’s immune system including helping to protect against bacteria and viruses.
Since the end of April, JAT has increased production at the Australian Natural Milk Association (ANMA) facility in Melbourne that it acquired in 2019. It is installing new equipment and added production shifts to meet growth in demand for healthier products. The ANMA factory is now moving to 24 hours a day (three shifts) for two days a week, running double shifts on the remaining days.
The acquisition of ANMA has enabled JAT to bring the development and manufacture of functional dairy products in-house and establish its own brands, such as the Abbeyard brand of children’s milk products for exclusive distribution in China by Hipac.
The first product under the Abbeyard brand is an A2 protein children’s milk formula packaged in cans and produced by ANMA. Hipac has ordered the first shipment of this product, valued at A$216,000 (US$140,547) for expected delivery in mid-June 2020.
Also, what is claimed to be the world’s first powdered camel’s milk modified with lactoferrin is also being produced for export. It is not known how these products will be packaged. The first batch worth about A$92,000 has been shipped to stores in Australia and to China.
In total, Hipac is expected to order A$4.8 million of JAT products in the first year.
JAT began building its China distribution network in 2015, sourcing products from third-party suppliers in Australia for export to China. The company’s strategy since June 2018 has been to develop its own products to sell into its China distribution network to increase margins. JAT now offers a range of its own products through its operating subsidiaries which include the Sunnya, Green Forest and Golden Koala brands.
“Our business is continuing to develop well as we are selling an increasingly broad range of highly-demanded products,” said JAT managing director Wilton Yao.
“We are now realising the benefits of our earlier efforts to establish relationships with a broad portfolio of distributors throughout China. Selling our own new and existing branded products through this network is allowing JAT to expand margins while we deliver revenue growth.
“Selling our new Abbeyard and camel modified milk products through Hipac and other platforms will support our goals of margin expansion and profitable growth.”