Dunedin-founded A2 Corporation has signed a joint-venture sales and marketing agreement with one of the UK and Ireland's largest milk processors and suppliers.
The joint venture is with London stock exchange listed Robert Wiseman Dairies, which processes almost a third of the daily fresh dairy milk consumed in Britain. Wiseman operates six major processing dairies and 14 distribution depots in Britain.
A2 shares on the NZX alternative exchange rose from 25c to 30c yesterday.
A2 managing-director Geoffrey Babidge said the joint venture was a "significant development" for A2 and consistent with its growth plan to establish a niche position in at least one new global milk market as a priority.
The UK fresh milk market is around 6.5 billion litres a year, and with a UK population of around 62 million, A2 estimates its sales could be three-fold of those in Australia. The venture is jointly funded by existing A2 and Wiseman resources, with A2 milk scheduled for launch in mid-2012.
In late-August this year, A2 Corp delivered a maiden profit of $2.11 million since listing seven years ago, and retained a cash balance of $7.5 million for expansion in Australia this year. Expanding operations in Australia are responsible for turning around last year's loss of $2.19 million to a $2.11 million after-tax profit for the year to June.
The $7.5 million cash in hand A2 retained this year is to be used to build A2's own milk processing plant in southwest Sydney.
The money came from a $4.5 million asset finance facility and $3 million raised last December.
The plant could produce up to 60 million litres of milk annually and production is scheduled to begin in January.
• A2 milk
Comes from cows specially selected by a DNA test to produce A2 betacasein protein rather than A1 variety, which may help digestive wellbeing.
