Synlait sells infant formula in China

Synlait sells infant formula in China

New Zealand dairy ingredients and infant formula firm Synlait Milk, in which China's Bright Food owns 51%, is considering listing on the stock market.

Synlait Milk is mulling an IPO on the New Zealand stock exchange, it said today (14 May).

Synlait Ltd, a private New Zealand company part-owned by Japan's Mitsui, holds the other 49% of Synlait Milk.

Prior to the IPO, Synlait Ltd said it would distribute its shares in Synlait Milk to its shareholders.

As part of the flotation, Synlait Milk plans to offer existing Synlait Ltd investors the opportunity to sell any of their shares in the dairy firm. Bright Food, which paid CNY382m (US$62.2m) for 51% of Synlait Milk in 2010, is expected to retain its full investment in Synlait Milk, the New Zealand firm said.

The proceeds from an IPO would be used to finance Synlait Milk's growth, including the building of a new packaging plant. It would also help the firm refinance its debt, it said.

Last week, Synlait Milk said it would invest to improve its production of lactoferrin. The move follows some significant contract wins with YinQiao Xi'An, the largest dairy manufacturer in north western China, Bright Food and New Zealand milk firm A2 Corp. Demand for lactoferrin is being driven by the rapid expansion of the Chinese infant formula market, the group added.