What: According to a research report 'Looking for a Sign' released last week by Australia and New Zealand Banking Group (ASX: ANZ) growing dairy demand in Asia could encourage Australia's milk production to almost double.
So What: ANZ Bank's research found that Australia's dairy industry is well positioned to capitalise on burgeoning demand for dairy products from countries such as China, Indonesia, Philippines and Vietnam. In fact, the report suggests the Australian milk industry could grow from 9.2 billion litres to 15 billion litres per year on the back of this growing Asian demand.
Now What: The key takeaway for ASX investors from the research released by ANZ Bank is that there are numerous opportunities to benefit from the predicted growth in Asian demand. Products growth singled out by ANZ Bank as expected to experience a rapid uptake by Asia's growing middle class included whole milk, powdered milk, cheese and yoghurt.
So how can investors benefit:
Amongst the listed companies which could be beneficiaries are the following five companies…
- A2 MILK FPO NZ (ASX: A2M) – New Zealand-based producer of cow's milk and infant formula
- Bega Cheese Ltd (ASX: BGA) – one of Australia's largest manufacturers of cheese, butter and other dairy-based products.
- Bellamy's Australia Ltd (ASX: BAL) – one of Australia's leading marketers of organic infant formula.
- Blackmores Limited (ASX: BKL) – the leading health supplement company has recently announced a partnership with Bega, which will see the development of a range of dairy-based products including infant formula.
- BEST GLOB FPO (ASX: BFC) – a newly listed company with interests in a number of dairy farms, dairy manufacturing assets and Asian distribution businesses.
Just be aware that investors need to dig into these companies further, as not all dairy businesses are guaranteed success.
