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SYNLAIT (ASX: SM1) has received registration to allow the exports of the a2 Milk Company's (ASX: A2M) infant formula to China to continue.
The approval is a big win for the Australian infant formula company, considering the stringent requirements China imposes on imports.
All manufacturers are required to register brands and recipes with the China Food and Drug Administration to import products into China form 1 January 2018.
The process includes the testing of raw materials and finished product testing, certification of manufacturing standards and formulation assessment.
Managing Director and CEO of the a2 Milk Company, Geoffrey Babidge (pictured), says the group's strategy has positioned them well to continue business in China.
"Our flexible multi-channel infant formula strategy in both China label products and cross-border English label products has positioned the a2 Milk Company well in the context of current regulatory requirements," says Babidge.
"We look forward to the continued expansion of our business in China following this announcement."
In June a2 Milk announced the strength of the brand in China and its ability to drive millions of extra revenue.
The increase in forecast revenue for FY17 was up by $19 million, thanks entirely to Chinese demand.
A2 Has been working closely with Synlait Milk to increase production of the infant formula line to meet demand.
Following rapid growth and sustained success of the a2 Milk Company's infant formula in the Asia Pacific region, Synlait and The a2 Milk Company announced a new supply agreement for a minimum term of five years in August 2016.
The a2 Milk Company acquired an 8.2 per cent shareholding in Synlait in March 2017 to further strengthen the relationship between the two organisations.
At the close of the market yesterday a2 Milk was trading at $5.99 per share.
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