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A2 Milk plans to enter US and expand in UK

Published 29 August 2014

New Zealand-based A2 Milk is planning to enter the US market, and improve its performance in the UK and Asia.

milk

A2 Milk, which accounts for about 9% of Australia's fresh milk market by value, said it will enter into the US next year.

The company is planning to invest around $20m in the US market over next three years and expand in the country in phases.

A2 Milk witnessed a 99% decline in its profits during the year ended 30 June, to $10,000 from $4.1m the previous year.

However, it recorded 17% rise in sales to $111m during the same period.

A2 Milk's sales from Australia increased 16% to $106.9m in the latest year, making for 96% of its total revenue.

According to the company, issues of distribution and awareness about the product in the UK and Asia had decelerated revenue growth.

A2 Milk plans to introduce UHT milk in China, where its sales were affected as its partner Synlait did not get regulatory approvals initially. It has subsequently obtained the necessary approvals.

The company plans to invest further in the UK, where it has incurred a loss of more than $2m last year.


Image: A2 recorded sales worth $111m. Photo: courtesy of BlackCab.