AuMake Int Limited’s [ASX:AU8] share price has risen slightly on news of a partnership with Pure Nutrition, to develop an exclusive range of A1 and A2 milk powder formula products specifically designed for the Chinese market.
AuMake’s shares are currently trading at 28 cents, up 7.69% from yesterday’s closing price.
Pure Nutrition is New Zealand’s second largest dairy operation, owned by 400 farming families and Ausnutria Dairy Corporation Ltd, one of the top eight dairy infant nutrition companies in China.
Terms of AuMake’s new development with Pure Nutrition
The supply agreement with Pure Nutrition is to develop an AuMake owned brand of milk powder formula products specifically tailored for the needs of the Chinese market.
The agreement is to develop A1 and A2 milk powder formula products, with the opportunity for future expansion into organic and goat milk powder formula products.
The company has decided to initially focus on the development of products that do not require China’s State Administration for Market Regulation (SAMR) approval — English-labelled infant formula, sold within Australia.
The initial annual target volume is for 1,000,000 units of the A1 beta-casein products and 600,000 of the A2 beta-casein products.
AuMake’s A1 products are scheduled for launch in October/November 2018, followed by the A2 product range in April/May 2019.
Keong Chan, executive chairman of AuMake, said that the company has long been aware of the potential of the milk powder formula market and has done its due diligence before committing to Pure Nutrition as their supplier.
‘The thorough examination of the entire supply chain, existing brands and our customers’ needs, revealed significant opportunities which we believe are currently unmet in this market.
‘The flexibility offered by our Supply Agreement with Pure Nutrition Limited provides us with the ability to tailor products to the specific needs of various segments and demographics within the Chinese market. We have identified the ageing population of China to be of significant interest with 241 million people over the age of 60, which is forecast to grow to 487 million by 20501.’
Will AuMake’s new partnership be enough to turn things around?
AuMake’s shares have been on a downward spiral since late last year. Despite today’s increase, the company’s shares are still down a total of 66.66% from its 52-week high.
This is definitely a step in the right direction for AuMake, but as for whether it will get back to its previous high still remains to be seen.
For Markets and Money Morning
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