On Jan. 18, 2018, SMC Nutrition Pte Ltd, a Singapore infant formula manufacturer was granted CNCA approval. It is now one of only three Singapore infant formula manufacturers registered and approved to export finished product to China (click here for all registered overseas infant manufacturers in China).
However, it is worth noting that on Jan. 15, SMC signed an agreement with Shanghai Chenguan Dairy Co., Ltd to supply infant formula.
Infant formula manufactured after Jan 1st 2018 requires registration and each enterprise can only register 3 product lines. These restrictions have prompted many enterprises to use the only workaround at their disposal to increase the number of product lines they can sell in China. This workaround involves buying controlling shares in other CNCA approved manufacturers which allows companies to extend their product portfolio via subsidiary proxy manufacturers.
For example, in 2017 Ausnutria bought 100% of ADP (Australian Dairy Park Pty Ltd) and half of Ozfarm (Oz Farm Royal Pty Ltd). China’s expansion into international markets via mergers and acquisitions has other advantages beyond extending the number of product lines which can be sold by Chinese enterprise. Chinese companies also get access to advanced manufacturing techniques, stable raw milk supply, enhanced product reputation and access to the international market. For domestic consumers, it means better access to imported products.
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