
Chinese-Owned Processor Reports Fifth Consecutive Loss Amid A2 Milk Buyout Speculation.
Yashili, the Chinese-owned dairy formula processor with a single site in Pōkeno, New Zealand, has reported its fifth consecutive year of losses. The company’s recent financial accounts reveal a loss of $23.5 million for the 12 months to December last year, a slight improvement from the prior year’s loss of $25.7 million. This persistent unprofitability, dating back to 2019, signals significant operational challenges for the local entity owned by China Mengniu Dairy.
The company’s declining financial performance is starkly evident in its revenue figures. Yashili’s revenue for the last reporting period was $57.9 million, a steep fall from $92 million in 2023 and $157.3 million in 2022. To sustain its operations, the parent company, Yashili International Group, injected a critical $31 million into the local entity in late 2024 and early 2025, underscoring the financial pressures on the New Zealand operation within the global agribusiness market.
Yashili’s business model is unique within the local dairy sector, as it does not operate its own farms. Instead, it sources raw milk from the local market, including under the Dairy Industry Restructuring Act (DIRA) from Fonterra. The plant, which cannot handle large volumes of liquid milk, is notable for its ability to process other types of milk, such as goat and sheep, and provides valuable consigned processing services for other companies, including a2 Milk Company’s premium formula.
Amid these financial woes, the future of the Yashili plant has become a subject of intense industry speculation. Analysts from Macquarie suggest a potential acquisition by the a2 Milk Company “would make sense” given their existing manufacturing relationship. This speculation gained traction after a2 Milk, as part of a share price inquiry, disclosed early-stage discussions about acquiring a manufacturing site, a move that could significantly streamline its supply chain and reduce its reliance on other manufacturers like Synlait Milk.
The article places Yashili’s struggles within a broader context of dynamic shifts in New Zealand’s dairy economics. It notes that a2 Milk’s majority-owned Mataura Valley Milk (MVM) is not expected to be profitable until 2027, while its former exclusive manufacturer, Synlait Milk, recently disclosed “manufacturing challenges” at its Dunsandel site. These interconnected events highlight the complex landscape of consolidation, competition, and operational challenges facing key players in the international dairy community.
Source: BusinessDesk: Dairy formula processor Yashili runs at a loss for another year
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