22 September 2012

Synutra plans to invest $118 million in a new drying facility in Carhaix, France

Commissioning expected by year-end 2014, to employ around 75-100

Qingdao, China and Rockville, Md. - 18 September 2012 (PRNewswire) - Synutra International, Inc., a leading infant formula company in China and a producer, marketer and seller of nutritional products for infants, children and adults, today announced the signing of a long-term industrial and commercial partnership agreement with Sodiaal, the leading dairy cooperative in France, and its subsidiary, Euroserum, the world leader in demineralized whey powders. 

Under this partnership agreement, Synutra will build a new drying facility in Carhaix, France (located in the Brittany region), intended to manufacture powdered milk and fat-enriched demineralized whey for the needs of the Synutra group. Located in the heart of the central Brittany milk-collection basin, this new drying facility will meet the strictest European quality and hygiene standards and will be capable of producing 60,000 tons of powder per year initially, with a designed capacity of up to 100,000 tons annually. 

Synutra anticipates spending approximately 90 million euros ($118 million) to build and operate this drying facility with the majority of funding for this project expected to come from PRC bank loans. The operational commissioning of the drying facility is expected to take place by year-end 2014, subject to full PRC government approval and, once completed, is expected to employ approximately 75-100 employees. Upon commissioning of the drying facility, Euroserum and Sodiaal will supply the facility with demineralized liquid whey and milk. 

This agreement and the construction of the drying facility in Carhaix remains subject to the approvals of the government of the People's Republic of China, granted by (i) the National Development and Reform Commission, (ii) the Ministry of Commerce and (iii) the State Administration of Foreign Exchange (SAFE). 

Mr. Liang Zhang, Chairman and CEO of Synutra said, "We are very pleased with this industrial and commercial partnership with Sodiaal and Euroserum. 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." 

Mr. Francois Iches, Chairman of Sodiaal said, "We are delighted with this long term partnership agreement with Synutra and its investment of a new drying facility in the Brittany region. This commitment is a strong signal for Sodiaal and our farmers of the long-term commercial relationship between the two groups." 

Synutra International, Inc. (Nasdaq: SYUT) is a leading infant formula company in China. It principally produces, markets and sells its products through its operating subsidiaries under the "Shengyuan" or "Synutra" name, together with other complementary brands. It focuses on selling premium infant formula products, which are supplemented by more affordable infant formulas targeting the mass market as well as other nutritional products and ingredients. It sells its products through an extensive nationwide sales and distribution network covering all provinces and provincial-level municipalities in mainland China . As of June 30, 2012, this network comprised over 650 independent distributors and over 800 independent sub-distributors who sell Synutra products in over 66,000 retail outlets. 

Source: Synutra