Through the expansion, which is expected to cost around €20m, ISM will build a new infant formula production and packaging facility – pushing its manufacturing capacity up to 50,000 tonnes per year by 2016. Biostime has agreed to purchase 18,000 tonnes of finished product per year.
“Looking forward to the future, Biostime needs to secure sufficient and sustainable supply of high quality milk source from Europe and continue to upgrade its infant formula process technology and innovative formulas,” said Biostime chairman and CEO, Luo Fei.
“We believe this will enable both parties to deepen cooperation while ensuring a long term and stable supply of high quality infant formulas and meet the growing market demand in China.”
Once the expansion is completed, Guangzhou-based Biostime will own an approximate 20% stake in ISM, and will be entitled to nominate one director to sit on the company’s board.