Trappist sees opportunity in delta after milk scandal
Trappist Dairy, the second biggest milk product supplier in Hong Kong, is eyeing the dairy market across the border where opportunities for newcomers are emerging following the tainted milk scandal two years ago.
General manager Michael Siu Wai-leung said that after focusing on the local market for more than five decades, Trappist Dairy was considering an expansion into Pearl River Delta cities within two years.
'We see a good opportunity there,' said Siu, who noted that the mainland dairy market had undergone great changes after the notorious melamine milk scandal in 2008.
Melamine, an industrial chemical, was found to be in widespread use in the production of infant formula and dairy products on the mainland after at least six children died of kidney stones and hundreds more suffered kidney problems.
The formula was supplied by major producers including Mengniu and Yili. The authorities recently reported abuses had continued last year.
'Mainland consumers have drawn a lesson from it,' Siu said. 'They have become more mature, no longer simply following advertisements and promotions. They have a stronger sense and better knowledge in selecting quality milk products.'
As a result 'Hong Kong-made milk' from Trappist Dairy should win the confidence of health-conscious consumers across the border, he believed.
'Big cities in the Pearl River Delta like Shenzhen and Guangzhou will be our first targets,' Siu said. 'We are now studying whether to set up a processing factory across the border or simply transport our milk from Hong Kong every day. We also do not rule out the possibility of co-operating with mainland factories.'
Trappist Dairy's origins date back to the 1950s when a group of priests in the Trappist Heaven Monastery on Lantau Island began producing milk on a small farm and with just a dozen cows.
Their milk became better known after the Hilton Hotel became one of their customers. To increase supply the farm was moved to Yuen Long in the 1980s and then to Guangdong province. Its processing factory still operates in Hong Kong.
These days Trappist Dairy is a subsidiary of Lark International Holdings, a conglomerate that also operates UA theatres and has interests in catering, property and apparel sectors in the city. Lark also has a milk processing, formulation and packaging plant in Guangzhou.
Last year, Trappist Dairy replaced Nestle Dairy Farm as the city's No2 pasteurised milk producer behind Kowloon Dairy. It has also become the biggest pasteurised fresh milk supplier in the city and also produces a variety of flavoured yogurt drinks, milk drinks and soy milk.
Siu said the company achieved more than 20 per cent profit growth last year as a result of value-added services to retailers and improvements in delivery services.
It now produces up to 20 tonnes of dairy products a day, and Siu expects 10 per cent growth in turnover this year once its second farm in Guangdong comes into full operation.
To boost sales and educate the public, Trappist will take a leading role this year to promote the 'World Milk Day', initiated by the United Nation's Food and Agriculture Organisation to raise awareness of milk as a nutritious food.
A series of activities will be organised in kindergartens, primary schools and public places during March and May.
'Children are our most important customers,' Siu said.
'By promoting the World Milk Day, we hope more kids can love drinking milk without being forced by their mums.'
