a2 Milk processing facility update

11 July 2011

A2 Corporation Limited

a2 Milk processing facility update

Construction is underway of A2 Corporation Limited’s (NZAX:ATM) own processing facility in south western Sydney to meet the growing demand for a2 Milk™ in Australia.

Production at the facility, the first to be operated by the Company in addition to using contract processors, is expected to begin in January 2012.

Chairman Cliff Cook says the commissioning will be timely.

“Our a2 Milk™ business in Australia continues to grow rapidly and the development of our own processing facility will allow for the continued expansion of the business. Sales growth has exceeded expectations in the six months to 30 June, 2011”

The new Sydney plant will comprise a medium-sized processing facility incorporating the most advanced proven processing technologies designed to achieve both the highest quality standard of fresh milk and at the same time competitive operating costs. The design also minimizes both the use of utilities and generation of waste.

Key features include:
• Modular design
• A purpose built food-grade factory of approximately 2,500 sq metres building area;
• Segregated areas for raw materials, processing, packaging, and a cool room;
• Milk collection facilities to accommodate B-Double train trucks;
• Staff amenities, laboratory, offices, car parking.

The facility will process approximately 10 million litres of milk per annum initially with capacity to process increased volumes over time. The site is conveniently located near motorways allowing for the efficient transportation of both raw milk and finished products.

The project has an estimated capital cost to the Company in the order of AUD 7.5 million.

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