Powdered milk demand in China driving Abbott's expansion

By Ankush Chibber

- Last updated on GMT

Related tags: Milk, Powdered milk

Powdered milk demand in China driving Abbott's expansion
Abbott has said it will invest US$230m to build a new nutrition manufacturing facility in China, representing the company's largest investment in China to date.

According to Julie A Ferguson, manager of public affairs at Abbott Nutrition, the new facility will manufacture premium powdered milk products for Chinese infants and children.

“The new facility will be based in Jiaxing and it is scheduled to be completed by 2013. When completed, the plant will become Abbott’s first fully integrated spray drying, blending and packaging facility in China and employ about 300 people,”​ she said.

Abbott has opened six manufacturing and R&D facilities in its nutrition and pharmaceuticals businesses in the Asia Pacific region during the past three years, including three in China, a statement from the company said.

Ferguson explained that the market opportunity for powdered milk products in China for infants and children was the driving force behind Abbott's decision to open this new facility.

“More than 17 million infants are born each year in China and rising incomes and a growing middle class have created increased demand for high-quality nutrition products,” ​she said.

“Abbott anticipates launching a number of new product innovations over the next three years across the pediatric nutrition category to meet this demand. The new plant will play a key role in bringing these innovations to the Chinese consumer faster,​” said Ferguson.

Ferguson would not comment on how much interest it expects to garner from China with this new facility but said that in light of the tainted milk powder scandals, its high quality, science-based nutritional products should gain a high reputation with the Chinese consumer.

According to the statement, the company expects to increase its nutrition revenues in China to above US$1bn by the end of 2014. In the first half of 2011, nearly 42 per cent of Abbott Nutrition's global sales were in emerging markets.

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