Chinese demand for Australian infant formula remains strong despite trade tensions says ViPlus
Australian infant formula maker ViPlus says its products remain as popular as ever in China despite threats of a boycott.
Milk formula maker ViPlus Dairy says demand for its products is continuing to grow in China, despite threats of an Australian boycott, as sales return to pre-coronavirus levels.
Chief executive Jon McNaught added an extra 12 employees to ViPlus’s factory at Toora in Gippsland in the past few months, after the company doubled its workforce to 120 last year. Mr McNaught said the company added a lactoferrin and collagen-powdered milk sachet product last month and demand was continuing to grow in China, despite China’s ambassador to Australia warning of a boycott after Scott Morrison spearheaded a push for an investigation into the origins of the coronavirus.
“There is going to be risks there and political bargy but we’re not seeing any impact on our products,” Mr McNaught said.
“Consumers are still wanting milk powders and milk products and we are seeing strong demand for our products in the market. Consumers are quite positive about them. We’re not seeing any negativity.”
Amid the COVID-19 pandemic tensions have flared between Australia and its biggest trading partner China. Beijing imposed punitive 80 per cent tariffs on Australian barley and suspended meat exports from four Queensland abattoirs.
Meanwhile, Mr Morrison revealed last month Australia was under sustained cyber attack from a “sophisticated state-based cyber actor” widely believed to be communist China, targeting all levels of government, essential services, critical infrastructure and businesses.
While ViPlus, which produces a range of infant and adult milk formulas, has yet to experience any blowback from the Chinese market, it isn’t entirely dependent on the Asian powerhouse.
Since April 2020, it has expanded to the Middle East (Dubai), Pakistan and Myanmar. The company is also finalising formulated milk products for a Philippines government school project, which will provide much needed nutrition to hundreds of thousands of Philippine students across several provinces. The first deliveries for these products are expected in coming weeks.
“We’re in 14 countries so it’s not just China the products are going to. We’re across Southeast Asia and the Middle East, which is a good growth area for us,” Mr McNaught said.
Last month, ViPlus finished installing its single sachet filling lines, providing the company with the largest capacity in this particular product segment in Australia. The company is now considering reinstating a second and possibly a third shift at its Toora factory, underpinning the financial prospects for the company through until the end of 2020 and beyond.
“Production is going pretty well. May and June have been pretty good months in terms of production and sales and forward orders, which is great.”
Mr McNaught said production had returned to pre-coronavirus levels after the pandemic initially wiped out around 35 per cent of sales.
“It was probably a bit higher at certain times but the average over the period was around 35 per cent,” he said.
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