Irish Dairy Board expands China presence with Kerrygold UHT milk

05-Nov-2014 - Last updated on 05-Nov-2014 at 13:27 GMT

Irish Minister of Agriculture, Food, and the Marine, Simon Coveney, unveiling the product in Beijing.

The Irish Dairy Board (IDB) has expanded its presence in China with the launch of a long-life, whole milk product under its Chinese Kerrygold brand, Jin Kai Li.

Ultra-heat treated (UHT) Kerrygold Whole Milk was unveiled by Irish Minister for Agriculture, Food and the Marine, Simon Coveney in Beijing this week.

The product - processed in Ireland by IDB using Irish milk - will be made available across China through national, regional, and e-commerce retailers.

The Dublin-based dairy, which already exports butter and cheese to the country, told DairyReporter.com it hopes to secure a top three position in the Chinese premium imported milk category.

To earn a podium place, IDB will need to ship at least 20m litres of Kerrygold Whole Milk from Ireland to China each year, the company said.

A marketing team has been installed by IDB in Shenzhen to aid its efforts - adding to business operations it has in Beijing and Shanghai.

Milk quotas

In preparation for the April 2015 abolition of the European Union (EU) milk quotas, a system introduced in 1984 to address the problem of over production, IDB has been expanding its in-market operations around the world.

The Irish Cooperative Organisation Society (ICOS) believes milk production in the country will increase by around 50% by 2020 as a result of the quota removal.

More than 11bn litres of milk are consumed in China each year, compared with just 670m litres in Ireland.

With such demand in the country for milk, China inevitably become an "immediate route" for Ireland's surplus milk.

“IDB’s investment in China and the entry of Kerrygold Whole Milk into the Chinese mass market opens us considerable market opportunities for the additional milk we are expecting post 2015,” said Minister Coveney.

Weighing in, Jeanne Kelly, spokesperson, IDB, said there are "few more significant countries than China in terms of opportunity for dairy growth."

Product development

Earlier this week, in a Shenzhen Stock Exchange filing, Chinese dairy Guangxi Royal Dairy announced it has signed a memorandum of understanding (MOU) relating to dairy product development with IDB.

The MOU, the first stage in the formation of a formal agreement, is completely unrelated to the Kerrygold Whole Milk launch, IDB told DairyReporter.com.

Subsequent talks between IDB and Guangxi Royal Dairy could result in the "development and sale of new products for the Chinese dairy market," said IDB.

“Manufacturing of the products, the main ingredient of which will be Irish milk, will be based on both Ireland and China. The agreement also agrees collaboration in the areas of branding, logistics, and distribution," it added.

Trade mission

Coveney, leading a delegation of 37 Irish companies, traveled to China with the aim of increasing Ireland's access to the world's largest dairy market.

At an Ireland-China dairy seminar in Beijing, hosted by Coveney, the Irish Food Board (Bord Bia) signed a cooperation agreement with the China Dairy Industry Association.

Welcoming the agreement, Aidan Cotter, CEO, Bord Bia said: "This marks another key progression for the Irish dairy industry and Bord Bia as we continue to build key trade relationships in China."