Swedish-Danish cooperative Arla Foods and China's baby food maker Biostime International have entered into ten-year financing and supply agreement.
Under the agreement,the two companies will co-invest a total of DKK163m($27.55m)to expand production capacity at Arla Foods'Arinco facility in Denmark.The investment will be utilised for installing processing and packaging equipment.The facility will supply milk to Biostime according to its specific requirements.
Arla Foods B-to-B nutrition business unit vice president Jens Jorgen Hjortshoj said that the deal enables the company to produce high-quality dairy products with superior added value,reported Dairyreporter.com
"This partnership with Biostime,a leading player in China's premium infant nutrition market,clearly reinforces our confidence in the long-term development of the Chinese premium infant formula market",Hjortshoj said.
Biostime International said that the agreement is targetted at securing a maximum annual production volume of up to 20,000 tons of infant formula powders for the company from 2015.
Recently,Arla Foods signed an agreement with Mengniu Dairy and food product company COFCO to widen the distribution and sales of Arla products in China.
