Special report: Keytone Dairy debuted on the ASX last week and quickly became one of the week’s top performers with shares closing up 80 per cent on its first day of trading.

Now, the company (ASX:KTD) is expanding its product range, announcing its first Anhydrous Milk Fat (AMF) product and its first order to boot.

Keytone is a New Zealand-based manufacturer and exporter of formulated dairy products – primarily whole and skim milk powder and other dairy powder blends.

KeyDairy Anhydrous Milk Fat is the company’s first ‘wet’ product, signaling its entry into the US$2.6 billion global AMF market.

The company has also received its first order for the product with Taiwanese international food service supply company Tehmag Foods Corporation putting in a NZ$268,000 first order.

Tehmag is Taiwan’s leading supplier of bakery ingredients and has more than 35 brand partners, now including Keytone Dairy.

As Keytone Dairy’s existing manufacturing facilities are geared for production of ‘dry’ products, it has partnered with Bakels Edible Oils, New Zealand’s leading supplier of edible oils to launch the product in 18kg tins for the food service channel, targeting the Greater China and South East Asia markets.

Bakels has guaranteed a minimum capacity of 400 tonnes over 12 months available to Keytone, with no corresponding minimum order obligation.

According to Keytone, the launch of AMF is validation of the company’s four-pillar growth strategy, as Keytone continues to expand its product range, recalibrates its production mix to proprietary products and extends its distribution into new geographies and markets.

Tehmag, the Taiwan-based and listed company that put in the first purchase order, has offices in China, Hong Kong and Malaysia, giving Keytone access to a significant portion of its target market.

The demand for Anhydrous Milk Fat has risen significantly over the past decade, with the market growing at a CAGR of 4.7 per cent from 2010-2017, according to a 2018 study from IMARC Group.

The product has several advantages over traditional dairy products. It contains at least 99.9 per cent milk fat and can be stored at ambient temperatures, making it more convenient, cost-effective and efficient for the logistics of food service users.

The rapid growth of bakery, food and hotel services in Asia has meant the demand for smaller packs of AMF – which Keytone is uniquely placed to deliver – is expanding, as it doesn’t require refrigerated storage and is light enough for individual handling without the use of specialised equipment.

The news caps off an extraordinary fortnight for Keytone, who listed on the ASX on July 16 following a heavily oversubscribed IPO. KTD shares spiked 90 per cent in the company’s first week, up to a high of 38c, almost doubling the original issue price of 20c.

The success has seen Keytone join the dairy and infant formula boom on the ASX in recent times, following names such as Bubs, Bellamy’s, Wattle Health and A2 Milk.


This special report is brought to you by Keytone Dairy.

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