Aussie exporter eyes China and wider APAC region with new in-house functional food and supplements

30-Apr-2019 - Last updated on 30-Apr-2019 at 02:30 GMT

Jatenergy wants to develop more products under the Golden Koala brand, which was a vital entry point for the firm into the Chinese market.

Related tags lactoferrin Infant formula aged care Australia

Aussie exporter Jatenergy has taken to developing its own brand of functional foods and health supplements, in the hopes of expanding further in China and entering several other APAC markets.

Through Jatpharm, a joint-venture firm with Chinese pharmaceutical company Sinopharm, Jatenergy will manufacture its own products in at a plant in Sydney — namely, formula products for infants and the middle aged, as well as vitamins and omega-3

Speaking to NutraIngredients-Asia, Jatenergy director Wilton Yao said the firm was in the final stages of deciding between two facilities, and expects to be able to sign the lease agreement for the chosen manufacturing plant by early April, after which renovation works are scheduled to commence in May and conclude by the beginning of 2020.

Jatenergy holds a majority 55% stake in Jatpharm, which also has two anonymous minority investors, one of whom will operate and manage the new facility. The other minority investor, along with Sinopharm, will serve as formulation specialists.

Currently, Jatpharm is in the process of securing a Certification and Accreditation Administration of the People's Republic of China (CNCA) licence, which will permit it to export infant formula to the country. Once the manufacturing plant is up and running, the company will also apply to register with Australia's Therapeutic Goods Administration (TGA).

In addition to its own brand of products, Jatpharm will also seek contracts from other companies to manufacture private-label products.

Manufacturing products to match market patterns

Jatenergy had earlier said that "current global trading conditions" supported the development of this project. More specifically, "increased trade barriers among some major trading countries" with regards to dairy products were a positive sign for this initiative.

It also wants to tap into demand from China's growing middle class, which is being driven by a new concept the Chinese call the 'big health' lifestyle — in essence, the consumption of a wide variety of healthy foods, including health supplements and dairy products with added nutrients.

Yao said: "Jatenergy has partnered with a number of major Chinese companies, including Sinopharm. Chinese companies are always looking for new products, especially nutritional products from overseas, such as Australia. If we don't have a facility to develop new products, it would limit our opportunities in China."

With Jatpharm, Jatenergy has chosen to focus on lactoferrin-based formulations for its products, taking advantage of Sinopharm's formulation expertise to develop dairy products enriched with lactoferrin.

"Sinopharm is a formulation expert, and we are establishing this facility to produce products for our in-house brand. One of our specialities is lactoferrin," Yao said.

"The main products we will be manufacturing under the JV are lactoferrin-based dairy formulations for both infant formula and middle-aged nutrition. There will also be vitamins, and fish oil for our omega-3 supplements.

"Soon, we'll be launching a milk powder product formulated with lactoferrin for middle-aged consumers in Australia and possibly China.

"We expect to make an announcement soon about our special range of lactoferrin products, and I believe we are the only company in the world right now that has developed such a wide variety of specialised lactoferrin products."

Deliberation and exploration

Apart from China, where it already has as presence, Jatenergy recently announced its expansion plans for Japan and South Korea, through a deal with Captain & Crews.

Yao said, "We've received the first order for our lactoferrin products from our partner in South Korea, and they will sell our products in the country's major duty-free stores. After that, we plan to expand to the Japanese market."

Last year, the firm bought a majority 51% stake in Australian milk powder company Golden Koala Group, using it as a vital entry point into the Chinese market.

At the same time, Jatenergy entered into an initial two-year agreement with distributor Jiangsu Jbingo International to distribute all its products — including Golden Koala's infant formula — to top mother and baby product platforms.

Golden Koala has a production agreement with one of the 15 Australian manufacturers accredited in China to export infant formula to the country. Its range of products include fresh full-cream milk, scientifically validated dairy milk infant formulas, and instant full-cream and skim milk powders.

Yao said, "We are looking at developing more products under the Golden Koala brand, which will be made available in China via various cross-border e-commerce platforms.

"We are in discussions with companies in countries like Vietnam and Hong Kong to see if we can expand there. We are also interested in Singapore and Malaysia, but that will come later."