The joint venture will produce dairy products, including infant formula, and other health products

The joint venture will produce dairy products, including infant formula, and other health products

Australia-based infant-formula exporter Jatenergy has made inroads in its aspirations to manufacture its own products with the formation of a joint-venture company Jatpharm.

Jatpharm will be based in Sydney, although a manufacturing plant has yet to be found. However, Jatenergy said in a statement today (28 February) it is in discussions with real estate agents to find a suitable site and expects the search to be completed in March or April.

The joint venture will produce dairy products, including infant formula, and other health products such as vitamins and supplements. Jatenergy will be the majority shareholder in the new business, holding 55%, along with three unnamed minority investors.

Jatpharm will seek to secure a license, known as the Certification and Accreditation Administration of the People's Republic of China (CNCA), which would allow the company to export infant formula to China. It will also look to obtain registration with the Therapeutic Goods Administration (TGA).

One of the minority shareholders will operate and manage the new plant, once it has been identified, under TGA regulations, Jatenergy said in the filing to the Australian Securities Exchange on which it is listed. The other shareholders are specialists in product formulation. 

"As a TGA- and CNCA-approved manufacturer, Jatpharm will produce in-house brand products, and seek contracts from other companies to produce private-label products," the statement added. 

New South Wales-based Jatenergy is targeting to complete stage one of establishing the factory by late 2019 or early 2020, subject to planning approvals. 

"Current global trading conditions support development of the project," Jatenergy said. "In particular, increased trade barriers among some major trading countries on dairy products, including infant formulas, bode well for the manufacturing initiative. 

"Demand from the growing middle class in China and other Asian countries is fuelled by a new concept known in China as the 'big health' lifestyle. This means people consume health supplements, quality dairy products with nutritional additives and other healthy foods." 

Earlier this week, Jatenergy, which is already present in China, announced it was expanding into South Korea and Japan via a deal with Captain & Crews. The company has also signing a number of recent supply deals including with Sinopharm - China National Pharmaceutical Group Corp. - via its subsidiary Green Forest International. It also bought a majority stake in local milk powder business Golden Koala Group as a key entry point into China.