September 1, 2014

New Zealand-based A2 Milk to expand markets

New Zealand-based A2 Milk is planning to improve its performance in the United Kingdom and Asia, and enter the United States market.

According to the company, issues of distribution and product awareness in the United Kingdom and Asia had slowed revenue growth.

A2 Milk plans to introduce UHT milk in China, where its sales were affected as its partner Synlait did not initially get regulatory approvals. It has since obtained the necessary approvals.

The company also plans to further invest in the United Kingdom, where it has incurred a loss of more than $2m last year.

Additionally, the company is planning to invest about $20m in the United States market over the next three years and expand in the country in phases.

However, the mainstay of A2 Milk's sales, Australia, increased 16% to $106.9m in the latest year, contributing 96% of its total revenue. The company accounts for about 9% of Australia's fresh milk market by value.

Overall, the company saw a 99% plunge in its profits during the year ended June 30 from $4.1 million the previous year. It recorded 17% increase in sales to $111m during the same period.