New Zealand companies eyeing China's milk market

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02:40

China's booming infant formula market will be one of the key targets for many international food companies attending the China International Import Expo in November.

As one of the world's leading dairy producers, New Zealand will have a strong representation at the Expo as it pitches for business in a formula market estimated to be worth 20 billion US dollars, and which analysts expect to grow by more than 20 percent in 2018.

New Zealand New Milk CEO David Spurway said that the Expo is "an opportunity for us to be on the ground in China, talking to people that are involved in the export trade and the regulations."

Since it entered the Chinese market in 2014, New Milk has grown its sales by 50 percent year-on-year and the company expects to dispatch more than 2 million cans of formula in 2019 from its factory in Auckland.

New Zealand New Milk is of one of 16 New Zealand manufacturers which have been granted approval from China's Certification and Accreditation Administration following the introduction of strict new food safety regulations and Spurway said that the tightening of regulations is welcomed.

"It's a good thing for us. 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."

Another New Zealand exporter attending the Expo is the A2 Milk Company, which has captured 5.4 percent of China's infant formula market.

The New Zealand government is sponsoring two country pavilions at the Expo which it hopes will build on the success of the historic Free Trade Agreement which New Zealand signed with China in October 2008. New Zealand China Council Executive Director Stephen Jacobi said that the Expo represents 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 consumer's needs in China."

Over the past decade, two-way trade between China and New Zealand has increased more than three-fold to 27 billion New Zealand dollars (17.4 billion US dollars) and is on track to meet a target of 30 billion New Zealand dollars by 2020.

Behind the scenes, government officials have also spent the past two years negotiating the details of a crucial upgrade and modernization of the FTA which according to Jacobi will "show that New Zealand and China are also leaders in trade liberalization and advancing globalization."