China Market, World Opportunity: New Zealand companies eyeing China's milk market

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New Zealand is among 130 countries represented at China's International Import Expo in Shanghai. As one of the world's leading dairy producers, several New Zealand companies will be promoting infant milk formula to the rapidly growing Chinese market that's estimated to be worth 20 billion US dollars. Owen Poland has more.

More than 46 thousand babies are born every day in China, and with demand for infant formula expected to grow by more than 20 percent this year - New Zealand producers want a slice of the action.

DAVID SPURWAY CHIEF EXECUTIVE, NZ NEW MILK "China's a fantastic place to do business, there's so much opportunity there. And the opportunity exists because of its size, because of its trade agreement with New Zealand, because of its desire for quality."

The New Zealand New Milk company is growing its formula business in China by 50 percent a year, and it'll be one of more than 100 New Zealand businesses attending the Import Expo.

DAVID SPURWAY CHIEF EXECUTIVE, NZ NEW MILK "We're a consumer brand so we've got to get out there and meet people in China."

The New Zealand government has also joined in by sponsoring two pavilions at the Expo to showcase goods and services.

STEPHEN JACOBI EXECUTIVE DIRECTOR, NEW ZEALAND CHINA COUNCIL "It's a big opportunity. It's a mark of China's openness to the rest of the world, and I think our companies have got to take up this opportunity and demonstrate the way they can meet consumers' needs in China."

A2 Milk is also attending the Expo to promote its A2 Platinum formula which has already captured five percent of the Chinese market - AND boosted A2's market value to nine billion New Zealand dollars.

PETER NATHAN CEO, A2 MILK, ASIA PACIFIC "We're the only brand which only contains the A2 beta casein protein, that's the core of our proposition. In addition to that, we are sourced from of course from the best part of the world."

OWEN POLAND AUCKLAND "The China International Import Expo coincides with the tenth anniversary of the historic Free Trade Agreement which New Zealand signed with China in October 2008. And it's hoped that the Expo will take the trade relationship between the two countries to a whole new level."

Competition in China is fierce, but New Zealand has been granted more officially certified infant formula products under China's strict food safety regulations than any other country.

DAVID SPURWAY CHIEF EXECUTIVE, NZ NEW MILK "For us it means as a manufacturer that we get a better run through into China with our products under a more regulated system that makes for a safer product."

A2 is also hoping that a new distribution agreement with China's Kaola-dot-com website will boost sales.

PETER NATHAN CEO, A2 MILK, ASIA PACIFIC "We believe e-commerce has now been given the tick of approval by the Chinese regulators so that'll continue to be a very important channel for us into the future."

And with 17 million additional Chinese mouths to feed every year, the precious milk from New Zealand's six million dairy cows will hopefully be more valuable than ever. Owen Poland in Auckland for CGTN.