A2 Milk will spend $167 million to acquire a manufacturing plant in China|BlackCab|CC BY-SA 3.0

A2 Milk is betting big on China’s infant formula market, even as the country’s birth rate hovers near record lows. The New Zealand-based company will spend $167 million to acquire a manufacturing plant in Pokeno from China Mengniu Dairy.

The deal reflects A2 Milk’s strategy to boost margins, streamline operations, and secure a stronger foothold in a critical market. The company also supplies baby formula to the US.

China’s average birth rate stands at just one child per woman—among the lowest in the world. Yet, demand for baby formula remains resilient, driven by consumer preference for premium products.

In addition, A2 Milk plans to invest more than $59 million to expand its production capacity in the region.