Friesland Campina, the Dutch dairy processor, has opened a new production facility in the Netherlands to manufacture base products for its range of infant nutrition products. Despite the recent downturn in the global dairy market, Friesland said it was expanding production to meet the “increasing worldwide demand for high-quality ingredients for use in infant nutrition”.

In fact, Friesland says its infant formula business has recorded volume growth of almost 16% for the first half of 2016 despite the lack of demand from important markets such as Asia.

Market leader

Friesland is the world’s largest producer of galacto-oligosaccharides (GOS), a prebiotic ingredient used to manufacture infant formula. These ingredients are then used by Friesland in the manufacture of its own infant nutrition range or sold for use by other customers.

Oligosaccharides are an important component of human milk not found in cow’s milk. Friesland developed the GOS ingredient at the turn of this century and it estimates that products containing it have been fed to more than 100 million children around the world since 2000.

The new production facility will be based in Borculo in the Netherlands, an area close to the German border.

Confidence

Despite the negative mood within the dairy market at present, where the supply/demand balance remains out of sync, Friesland appears to be giving a vote of confidence to the industry if it sees a need to expand its production of infant formula ingredients.

Friesland clearly has faith that the demand for infant formula in Asian markets with high growth potential will recover and continue to rise. Dairy imports to China, which is the world’s largest buyer of dairy commodities, have decelerated significantly over the past year, which is seen by many market analysts as the major reason for the collapse in the global dairy market.

Despite this, there are tentative signs that Chinese buyers are actively returning to the market.