Chinese infant nutrition firm Synutra International has been able to capitalise on the Beijing’s production licence initiative, picking up distribution where other companies fail to gain a permit.
Revealing the company’s full-year results, chairman and CEO Liang Zhang said Synutra experienced “strong” top-line growth throughout the year.
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“Our 2014 fiscal year was marked by changes in the competitive landscape of China’s infant formula market with the government’s growing focus on food safety regulations. In recent months, both of our milk formula production facilities successfully renewed their production licenses, while almost one third of manufacturers in China were not able to do so. As a result, we were able to expand our network through strategic acquisitions of two new milk formula brands, each with strong sales and distribution networks in their respective regions,” he revealed.
“To further take advantage of opportunities within this changing space, we are expanding the scope of our new drying facility project in France to include infant milk formula production as well.”
Sales for the fiscal 2014 year ended 31 March increased 39% to US$370.5m. Net sales from branded powdered formula products increased to $314.3m, compared to $224.4m last year.
Gross profit increased 62% to $153.5m while operating profit rose to $41.6m, compared to a loss of $14m. Synutra’s bottom line also swung into the black – rising to $30.9m versus a loss of $63.9m.
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