Keytone - seen increased demand from China

Keytone - seen increased demand from China

New Zealand's Keytone Dairy is changing the mix of its exports to China to cope with coronavirus-related demand.

The Christchurch-based milk-powder maker told the Australian Securities Exchnage (ASX), on which it is listed, that while it believes the outbreak of the disease will have an immaterial impact on its business, it has changed the nature of its exports to the market.

The statement, issued today (26 February), said: "Chinese consumption of staple food products, including dairy, is reported to have increased substantially due to the coronavirus crisis, including those sourced from New Zealand and Australian dairy.

"Keytone's product development team is prioritising development of immunity-style nutritional products to meet in-bound demand from the Chinese market."

The dairy revealed it had received a further order from Walmart China ahead of schedule as an indication of increased demand.

Keytone admitted that shipping and general supply chain logistics to and from China have been disrupted and has resulted in the postponement of a small number of Chinese orders received by the business.

But it said sales of staple food products in China have been reported to have experienced substantial increases. 

"Among others, the major Chinese online retailer JD.com has reported a substantial increase in food and health-related product sales, including products such as the New Zealand and Australian-made products manufactured by Keytone," it said.

"The outbreak has also focused Chinese consumers on immunity-boosting health products and, as a result, in recent weeks Keytone has received in-bound interest in immunity-style, nutritional-based products for Chinese markets."

It added: "Consequently, Keytone's product development team, as a matter of priority, is working on a roll-out of immunity boosting nutritional SKUs, to satisfy the in-bound wholesale customer requirements for the China market."

Keytone's CEO Danny Rotman said: "Whilst we are carefully monitoring the coronavirus outbreak in China and we hope that the health crisis abates quickly, at present it has had an immaterial impact on the Keytone business.

"Rather, we have seen a noticeable increase in demand for immunity-boosting nutritional products, particularly those bound for China, and we are in a unique position to respond to these changing customer demands through our experienced in-house product development team."