In 2010, The a2 Milk Company
(ASX:A2M) first started working with Synlait Milk to manufacture infant formula.
Now, both companies have reaffirmed their partnership by entering a new supply agreement to produce a2 Platinum infant formula.
This new deal is for a minimum term of 5 years, and provides a rolling 3-year term after the first two-year period.
The key terms of this deal include: (a) committed supply by Synlait up to a certain product volume, (b) while a2 will be Synlait’s preferred customer – with committed production capacity, as well as favourable and competitive pricing terms.
The a2 Milk reported a net profit of $9.5 million at 31 December 2015.