Wattle Health Australia (ASX: WHA) is on the path to be the first company offering the Australian market organic A2 nutritional dairy products.
The company’s 45%-owned Corio Bay Dairy Group joint venture has inked an agreement to secure organic A2 fresh milk from organic dairy farmer co-operative Organic Dairy Farmers of Australia.
Corio Bay is constructing the country’s first dedicated nutritional spray dryer in Victoria where the Organic Dairy Farmers’ milk will be processed.
As part of the deal, Wattle Health has first rights to all Corio Bay’s products and will use the organic A2 milk as the primary ingredient in its nutritional dairy range.
“Corio Bay’s securing organic A2 fresh milk from respected partner Organic Diary Farmers is significant, and further strengthens Wattle Health’s ambition to be the premier organic nutritional dairy company in Australia,” Wattle Health executive chairman Lazarus Karasavvidis said.
“To be the first to market with the highly valued organic A2 product is testament to the quality and value all joint venture parties bring to Corio Bay.”
“This allows Wattle Health to further differentiate ourselves from our competitors,” Mr Karasavvidis added.
Commenting on the deal Organic Dairy Farmers chief executive officer Jeff Cole said the company was “pleased to support Wattle Health” in its goal to bring organic A2 products to the Australian market.
“Organic Dairy Farmers are continuously looking for opportunities to ensure we remain the leaders in organic milk production and that we develop and invest in projects that continue to add value for our members.”
“It’s an exciting time to be part of the organic dairy industry in Australia as the unprecedent demand for organic products we are currently experiencing continues to rise,” Mr Cole added.
According to Wattle Health, organic A2 nutritional diary products have not yet been brought to market.
Anticipating it will be the first company to do so, Wattle Health expects its unique offering will “substantially increase” brand awareness as well as domestic and international sales.
Launching infant formula range into China
Today’s new follows a legally binding agreement with International Supplies and Distribution Company to supply Wattle Health’s infant formula range into the country.
Under the initial agreement, International Supplies and Distribution Company will sell 5.2 million units of products over 42 months, which is estimated to generate $100 million.
After the 42 months, the parties have leave to negotiate new annual volumes.
This morning’s deal spurred Wattle Health’s share price up almost 5% to reach $0.85 in early morning trade.