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Business / Companies

Aussie baby formula producer triples profits on back of Chinese demand

(Xinhua) Updated: 2016-08-19 13:38

MELBOURNE - One of Australia's biggest producers of infant formula has tripled its profits in a year due to a sales boom in China.

Bellamy's Australia recorded a 322-percent increase in its net profit, to $29 million in the financial year which ended in June 2016.

The Tasmanian-based company's total revenue also soared, up 95 percent to $187 million.

Bellamy's attributed the rapid growth to a growing demand for baby formula from the Chinese market, where the company's revenue grew 331 percent on the previous year.

"We are passionate about producing world-class, safe, clean, organic products so that babies can have a pure start to life," Bellamy's CEO Laura McBain told News Limited on Friday.

"This passion has underpinned our brand, making us the leader in organic food and formula products for babies and toddlers in Australia, with a growing strong reputation among Chinese parents.

"We recognize the importance of having a multichannel distribution strategy in China, and providing easy access to our products for parents regardless of their physical location.

"This philosophy ensures that as consumer preferences in China evolve, we remain agile and able to adapt to changing consumer purchasing trends and government regulations."

The better-than-expected financial results have seen the company's shares continue to grow at a rapid rate, from $1.07 per share when the company became publicly traded in August 2014 to $10.26 per share at close of trading on Thursday.

High demand from Chinese consumers forced Bellamy's to raise the price of its organic baby formula for the first time in five years.

"Having held our infant formula pricing for five years, in December 2015 we increased prices to balance cost increases for organic ingredients and ensure our formula was appropriately priced given its premium organic nature. This has delivered benefits to our gross profit margins in the financial year 2016," McBain said.

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