Warrnambool Cheese and Butter (WCB) has released details of a $24 million export deal with China.
The company flagged the lucrative agreement at its annual meeting this month but confirmed late yesterday that it had secured a deal to provide lactoferrin to the Asian giant over the next three years.
WCB has entered a memorandum of understanding with Toong Yeuan Enterprise to serve as the exclusive distributor in China, including Hong Kong and Taiwan.
Lactoferrin is a dairy extract commonly used in infant formulas. It is also a nutritional food ingredient used in fresh dairy products and yogurts.
News of the deal comes amid a three-way takeover battle between Saputo, Bega, and co-operative Murray Goulburn, and a share acquisition from Japanese food giant Lion.
In a statement to the Australian Stock Exchange yesterday, WCB general manager of sales and innovation John Williams said the agreement would fuel China’s demand for quality dairy products for infants.
“Given the increasing focus on food security and safety in China and the growing demand for high quality, premium dairy products for infants in particular, China is a key market for WCB’s lactoferrin,” Mr Williams said.
The dairy processor will likely increase the size of its workforce to cater for the exports.
Construction of its lactoferrin plant in Allansford is expected to be finished next month with the first sales to take place in January. South West Coast MP and Premier Denis Napthine welcomed the deal that was struck during the state government’s recent trade mission to China.
“This significant new export agreement is testament to the world-class products, services and expertise Victorian companies like Warrnambool Cheese and Butter have to offer,” Dr Napthine said. “It is exciting to see multimillion-dollar opportunities like this new deal with Warrnambool Cheese and Butter facilitated through the Victorian Government’s Super Trade Mission program.
“China is dealing with rapid urbanisation and a fast growing middle class and the demand for Victoria’s quality food products has the potential to grow exponentially.”