Synlait secures supply agreement to expand Dunsandel milk protein unit

Synlait, the dairy processing giant of New Zealand has reportedly secured a long term lactoferrin supply agreement. The agreement will allow an investment of $18 million to double the manufacturing capacity of lactoferrin and expand the Dunsandel plant.

The agreement is a big step in establishing Synlait in protein hydrolysate market as lactoferrin, recognized for its anti-bacterial, anti-inflammatory and iron-binding properties, is a highly valued specialty ingredient used in a number of food products. Reports claim that as a natural milk protein, lactoferrin also finds wide application in infant formula products.

Synlait CEO and Managing Director John Penno has reportedly said that the agreement is a major step for the growing lactoferrin business of Synlait and delivers to the company’s strategic commitments. He added that three of the major factors that will underpin the doubling of lactoferrin manufacturing are the strengthening of lactoferrin global market, building a reputable portfolio of lactoferrin customers, and the growing demand for Synlait’s infant formula manufacturing.

Penno believes the deliberate building of Synlait’s lactoferrin business with long term growth plans will build Synlait’s reputation as a credible producer of specialty dairy nutrition ingredients. This would also establish Synlait as a potential player in protein hydrolysate market, claim experts.

Dr Elizabeth Reid, Group Category Manager for Synlait said that the laboratory and technical expertise available in Synlait to produce lactoferrin are superior and unique. This will presumably put Synlait in a prestigious position in protein hydrolysate industry and infant nutrition-grade lactoferrin manufacturing market. She went on to add that lactoferrin commands a higher price per metric ton when compared to other dairy based ingredients.

In FY18, Synlait observed that demand and supply imbalance of lactoferrin has strengthened its prices and the demand for lactoferrin in infant formula has driven the overall market. Seemingly, the agreement is an outcome of this observation.

The expansion of Synlait lactoferrin plant is expected to be completed by October 2018.