July 2, 2018 / 9:38 PM / 2 years ago

New Zealand's Synlait Milk extends a2 Milk Co supply deal

(Reuters) - Synlait Milk Ltd (SML.NZ) (SM1.AX) said on Tuesday that it extended its supply deal with a2 Milk Company (ATM.NZ) (A2M.AX) by two years.

The deal for a2 Platinum infant formula and other nutritional products is now scheduled to end on July 31, 2023 and features a higher volume of infant formula products over which Synlait already has exclusive supply rights, as well as an increased committed production capacity from Synlait.

Synlait provides a2 Milk with products for its largest markets based in Australia, New Zealand and China.

a2 signed a supply deal with Synlait in August 2016 to make a2 Platinum infant formula for five years. The firms first collaborated in 2010.

The pricing terms of Tuesday’s revised deal reflect both firms’ commitment to an “ongoing market-competitive pricing regime”, Synlait said in a statement.

Synlait reported a record first-half net profit in March, helped by booming Chinese demand for infant formula from branding partner a2.

Reporting by Aaron Saldanha in Bengaluru

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