Aussie dairy factory picks up steam to please Chinese moms

Hamish Reid, business manager for nutritionals of Australia's Tatura Milk Industries, has apologized to a group of Chinese merchants for not being able to meet their demands for infant formula milk powder.

Reid, however, promised to provide them with more products next year when the factory's canning capacity picks up.

That was during a tour of Tatura factory in northern Victoria earlier this month by the Chinese distributors of a new Australian infant milk powder brand, OZcare, owned by Chinese-Australian businessman Norman Li.

A baby boom in recent years and a series of food safety scandals in the Chinese dairy industry have led to a soaring demand for overseas milk products.

Because of this, Tatura, a subsidiary of ASX-listed Bega Cheese, was caught underprepared.

Had there been no robust growth of the Chinese infant formula market, Tatura would have maintained the same business pattern of manufacturing basic milk powder and selling them to big or small brands.

For years, Tatura has been a reliable upper-stream manufacturer of world famous brands, including Mead Johnson, Wyeth and Karicare, which it send to their factories in other countries, like China. The receiving factories will handle the mixing and packing of the finished products.

Among Tatura's four dryers, one was fully contracted to make infant formula powder for Mead Johnson. Tatura's single canning workshop is run by a Japanese company. All other brands manufactured by Tatura had to use the same workshop for canning, making packaging a bottle-neck for a production increase.

These arrangements greatly limited its manufacturing and packaging capacities. At present, there are less than 10 brands of infant formula which are completely manufactured in Tatura.