A2 gears up to milk the US market

Alternative milk processor A2 Corp is gearing up for a big push into the United States market as it expresses confidence of finally achieving a profit within the next few years.

The NZAX-listed company owns and licenses intellectual property relating to A2 milk, which contains a protein variant linked by a number of studies with potential health benefits.

This week its shares were listed at 6c. Over the past year they have ranged from 16c to 4c. A2 recently reported a $920,000 loss for the March year, compared with a loss of $9.01 million the previous year.

A2 is gearing up for a capital raising of about $4 million to help it to fund offshore expansion.

The company already operates in New Zealand and Australia, and chief executive Andrew Clarke said the US was logically the next big English-speaking market to crack.

He said A2 had a good relationship there with its 50-50 joint-venture partner IdeaSphere.

US research indicated consumers "across the socio-economic spectrum" were alert to new products with health benefits, Clarke said.

"The US does have a significant demographic that is discerning ... especially when it comes to added value." The company said this month that research suggested consumers were willing to pay a premium for A2 and product launch planning was advanced.

The goal was to have A2 milk commercialised and sold in selected US markets in the 2006-07 financial year.

The company was also looking at several other offshore markets.

In Australia, where the company had reacquired the business of A2 Australia, A2 milk was now available in more than 700 supermarkets. In New Zealand, it was keen to work with licensees to expand sales.

Clarke hoped A2 could become a more mainstream stock as it achieved further success, and was confident the firm's international operations would see it achieve profitability within the next few years.