Aussie dairy factory picks up steam to please Chinese moms(2)

One of them is OZcare, an Australian brand but sold mainly in the Chinese market. Norman Li, chairman of Careline Group, which fully owns OZcare, said he spent three years researching the dairy industry in Australia and the market in China before finalizing his deal with Tatura.

Li said Tatura, being the industry leader and enjoying a good reputation for its high quality products, could withstand the strictest scrutiny of Chinese mothers.

"Most of the Chinese families have only one child. So mothers are extremely concerned with the products that their babies are going to use," Li said.

A series of scandals in the Chinese dairy industry has affected consumer confidence on China-made products. An increasing number of Chinese mothers have begun to buy foreign brand infant formula, especially those which are completely manufactured outside of China.

The Chinese distributors said OZcare is a beginner in Chinese market of infant formula but has recorded strong growth. The major challenge at this stage is to maintain a stable supply. The production of OZcare by Tatura is 300 tons this year, which is deemed insufficient to meet the current demand. The volume is expected to rise to 1,500 tons next year.

Partly prompted by the increasing demand from the Chinese market, Tatura has shifted company strategy from focusing on basic milk powder supply to more profit-rich whole production.

New steps include reclaiming 25 percent of the production capacity of the dryer contracted to Mead Johnson. It also made new investments in building up new packing lines.

With these policies in place, Reid dared to promise the Chinese distributors of more OZcare infant formula next year.

Li is more ambitious for the future. Realizing that most Australian babies are drinking foreign brand infant formula since there is no competitive domestic brand in the market, Li has decided to explore Australian market as well as keep expanding in the Chinese market.

He has set his goal for OZcare to become No.1 infant formula brand in Australia. The first step would be putting OZcare on the shelves of Australian supermarkets next year.

"Most of the profit of OZcare will go to charity. That's my way of self-fulfillment," Li said.