Australian Dairy Nutritionals Group in organic a2 infant formula plan at Camperdown

Australia’s first homegrown organic infant formula based on the a2 protein could be in production in less than a year in southwest Victoria. This is how the company behind the product plans to make that a reality.

Australian Dairy Nutritionals Group's new infant formula plant at Camperdown is expected to be in production next June.

CAMPERDOWN milk processor Australian Dairy Nutritionals Group will begin commercial production of a specialty infant formula range “ultra gentle” to babies’ stomachs next March.

The Tummy Health formula range is believed to be a world first and is the product of 18 months of development.

Australian Dairy Nutritionals Group said the formulation complemented the changes in a baby’s digestive capability in the first 18-24 months of life.

Chief executive Peter Skene said the company was excited about the new product.

“I have not seen a range of infant formula focused on infants’ needs like this anywhere in the world,” Mr Skene said.

He said Australian Dairy Nutritionals Group had planned to produce the infant formula at its new processing plant in Camperdown but had now found a contract manufacturer to produce the range.

The Camperdown plant was expected to be commissioned next June.

Mr Skene said contracting an external manufacturer meant the Tummy Health infant formula should be in the market next March.

It also freed up the Camperdown plant to concentrate on the nation’s first homegrown organic infant formula based on the a2 protein.

The company told the Australian Securities Exchange last week it had also sold its Drumborg farm for $6 million, which included all assets except the a2 cattle milked on the property — more than half of its 502 cows.

Those a2 cows would become part of Australian Dairy Nutritionals Group’s key herd supplying the Camperdown operation.

The company was in the process of converting all its four remaining farms to organic milk production, with the first achieving accreditation in November last year.

Mr Skene said another farm with a2 cows would reach organic certification next March, just in time for the commissioning of the infant formula plant.

He said the dairy company had decided to switch its infant formula focus from organic to organic a2, a more lucrative market and where it had a competitive advantage.

“We will still produce organic products but will focus on organic a2,” he said.

“A2 is the premiumisation of our organic brand.”

Australian Dairy Nutritionals Group was building an infant formula plant using a small, second-hand spray dryer purchased overseas.

The new plant had provision to move to a bigger dryer once the small one reached capacity.

Mr Skene said it would also eventually house its own canning equipment.

He said, with the farms owned by the company only 30 minutes from Camperdown, it would be focusing on a “farm fresh” marketing advantage.

He said some local organic infant formula competitors were buying their base milk powder from Europe and New Zealand.

“That could mean the milk powder was 12 months to two years old,” he said.

“We can put our products out within a day.”

Mr Skene said control of their own supply chain and having a range of existing organic products meant Australian Dairy Nutritionals Group could readily switch from one product line to another if unforeseen problems emerged in the market.

Shares in Australian Dairy Nutritionals Group rose 35 per cent last week to 8.3 cents on the back of the announcements to the ASX.

That was against a 3.8 per cent fall in the ASX All Ordinaries Index, it’s worst week since April.

The share price rose a further 0.4 cents to 8.7 cents at the close of the ASX today.

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Peter Hemphill’s family has shares in Australian Dairy Nutritionals Group.