New Zealand infant formula manufacturer Synlait Milk has announced a “significant expansion” to its supply agreement with local dairy and infant-formula group A2 Milk Co.

The companies signed a supply deal in August 2016seven months before A2 bought an 8.2% stake in Synlait – which provided for a minimum term of five years, with a rolling three-year term from 1 August 2018.

The key components of the revised agreement are a two-year extension to the term of the agreement, effectively providing for a new minimum term of five years to 31 July 2023, an increase in the volume of infant formula products over which Synlait already has exclusive supply rights and a commitment to increased production capacity from Synlait.

The companies said the agreement continues to reinforce the two companies’ close working relationship as they work to develop the A2 Platinum infant-formula product for the Australasian and Chinese markets.

Synlait managing director and CEO John Penno said: “The success of the A2 Platinum product has exceeded all expectations over the past two years. This step is about bringing Synlait and the A2 Milk Company closer together in anticipation of continued growth.” 

“It also puts both companies in a great position to further leverage the Chinese Food and Drug Agency (CFDA) registration of A2’s infant formula products, which was achieved in September 2017.”