Under the agreement, Synutra will build a new drying facility in Carhaix in the Brittany region of France, which will manufacture powdered milk and fat-enriched demineralised whey to meet consumer demand from China.
Once operational, the facility will be supplied with 280m litres of milk and 30,000 tonnes of demineralised liquid whey per annum by Sodiaal and Euroserum.
Synutra plans to invest around €90m ($118m) on construction of the facility, which once completed and fully operational will be capable of producing around 100,000 tonnes of powder each year.
Through the deal, which is subject to Chinese government approval, between 75 and 100 jobs could be created at the Brittany-based plant.
Synutra has claimed that the new plant will meet the “strictest European quality and hygiene standards”, which it hopes will increase the confidence and trust Chinese consumers hold in its products.
“This opportunity allows Synutra to secure its long-term supply of high quality raw materials and fuel Synutra’s future growth while maintaining the highest quality standard for our products. We are confident this collaborative effort can further increase consumer confidence and trust in our premium nutritional products,” said Synutra CEO and chairman, Liang Zhang.
Sodiaal director of communications, Jacques Caillaud, told DairyReporter.com that Synutra will benefit from assurances and guarantees about the quality of the milk and whey it is supplied with, while profiting from the expertise held by Euroserum in the production of demineralised whey.
EU Quota abolition
Caillaud added that the deal was agreed in anticipation of the up-coming European Union (EU) milk quota abolition in 2015.
EU Member State milk producers have been allocated milk quotas since the mid-1980s in an effort to limit the supply of milk within the economic region.
Milk production in the region is expected to increase significantly in the years following the abolition – a forecast Sodiaal is looking to capitalise on.
“[We entered into this agreement] in preparation of the end of milk quotas in 2015, Sodiaal anticipates the milk production will increase,” said Caillaud.
“Synutra wanted to establish [itself] in France to ensure milk supplying and sanitary quality. Sodiaal can meet Synutra’s need in quantity as well as in quality. Sodiaal also facilitates the opening of a plant in an area where milk production is significant,” he added.