In late December 2013, the proposed merger between Aspen Nutritionals and the local infant nutrition business of Pfizer Nutrition was approved by the Competition Tribunal. The tribunal imposed no conditions on the deal as it could find no evidence that the merger would prevent or lessen competition in the domestic market for baby milk.
The merger represented the second part of the Nestlé South Africa and Pfizer Nutrition transaction between the largest and third-largest players in the local infant milk formula market.
Pfizer Nutrition is a paediatric nutrition company. Its brands include the S-26 range of infant formulas, Infasoy and Centrum Materna, which is a range of maternal supplements.
The Competition Commission had said in its recommendation of the Aspen transaction that because Aspen had committed not to consolidate its Infacare baby milk brand with Pfizer’s baby milk brands, consumers were unlikely to be affected by the deal as they would still be able to choose between the existing Pfizer brands and the Aspen brands on the shop floor.
The tribunal’s condition for approving the Nestlé South Africa and Pfizer Nutrition transaction included that the purchaser of Pfizer’s infant milk formula had to maintain competition between the existing Nestlé and Pfizer brands in the market. A similar set of conditions was imposed by several international competition agencies, including the Australian and Mexican authorities.
Nestlé has chosen Aspen as the appropriate licensee to continue producing and marketing the Pfizer baby milk brands and there is little wonder that the company is willing to put its faith in Aspen Nutritionals (AN), a business that has provided nutrition to millions of children for the best part of 50 years and is now helping to fortify South Africa’s future.
The company’s products are recognisable in the infant’s section of almost all major supermarkets and the name has become a byword for quality and reliability. Indeed the company’s mantra is: “We care”, a point borne out by its dedicated Careline, which aims to provide mothers with the expertise of a fully qualified nursing sister, should they need advice.
AN fully recognises that breast milk is best for babies, but at the same time there is a large market for infant formula as a replacement when mothers do not breastfeed.
The company is a part of the global giant Aspen Group, which has its headquarters in Durban, but exists as a standalone manufacturing centre that supplies parents and Healthcare Professionals with quality, affordable nutritional products that are scientifically manufactured in compliance with the highest international standards.
Foremost among its product range, is a range of milk-based drinks and formulas that have been specially developed to provide extra nutrition to youngsters of varying age groups.
The portfolio of Aspen Nutritionals products is subject to ongoing consumer demand. The array of well-established brands includes the Infacare range comprising Infacare Classic, Infacare Gold, Infacare Nurture as well as Melegi, an export nutritional product. Aspen Nutritionals also supplies a range of Infacare Juices and Blended Teas in 12 favour variants.
Each product is designed for a specific phase of growing, based of course on the infant’s age: to that end AN sells Starter Formulas for children aged 0-6 months, Follow Up Formulas for those aged 6-12 months and Growing Up Miles for infants over a year old.
The company manufactures at a 35,000 metre square factory located in Clayville, near Johannesburg, and has a rich history, having changed owners a number of times down the years. The nutritionals company was started up by Wyeth Nutritionals in the 1960s but they disinvested during the Apartheid years. Subsequently the company was known as Nutricia Pty Limited and as of June 15, 2004, became a part of Aspen Nutritionals Pty Ltd.
AN only manufactures nutritionals in South Africa but has a distribution chain stretching across the Sub Sahara region and its Infacare range of products is readily available in Botswana Burundi, DRC, Ethiopia, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Rwanda, Seychelles, Swaziland, Uganda, Zambia, Zanzibar and Zimbabwe.
Of course selling products across so many countries means AN could encounter language barriers, to counter this potential problem the company has launched market specific infant nutritional products under its Infacare 1, Infacare 2 and Infacare 3 ranges in the following languages: English – French, English – Swahili, English – Ndebele/Shona (Zim), English – Ibgo/Hausa/Yoruba (Nigeria), English – Portuguese.
Originally based in Isandro, also near Johannesburg, the current Clayville site began operations in 1993, before everything moved over to the current site a decade ago. The site is home to 122 permanent manufacturing staff and 65 fixed term contract workers, but also plays host to the company’s sales and marketing and product development teams.
Over time the company’s Infacare range has built into a legacy brand that parents have grown to rely on for their children. The products are available both through pharmacies and all the major superstores.
Marketing is of course an essential aspect of AN’s operations, and within such a highly regulated market place, has its limitations. However that did not stop the launch of the company’s Nutrikids range of flavoured milk drinks in April of this year, which has had a helping hand from Nick the Dinosaur, a character created to add fun to the product and capture the imagination of children.
Nutrikids is another specially formulated milk drink that comes in four distinct flavours: chocolate, strawberry, banana and vanilla – and is specifically targeted at children of three years and upwards.
Clayville operations mark AN out as one of only two manufacturers of such products in South Africa, the other company being the global giant Nestle.
Aside from marketing red tape, the company has a multitude of other types of regulatory requirements, with production taking place in accordance with Current Good Manufacturing Practices (CGMP) and all processes HACCP-certified through Food Safety Services International (FSSI) which in turn is accredited with the South African National Accreditation System (SANAS). In addition the Clayville site has been ISO 22000 registered.
As one would expect, testing raw materials and quality assurance formulate an essential part of operations. Raw materials are procured through a certified supplier together with the appropriate certificates of analysis. The company conducts tests on all incoming batches of raw materials which are controlled by chemical, physical and microbiological methods.
AN has also developed Quality Assurance protocols which are adhered to at all stages of production. During the different stages of the manufacturing process including wet processing, spray drying, dry blending and filling, each batch is analysed for relevant chemical, microbiological and physical properties. The process is further controlled by continuously monitoring critical control points such as pasteurization.
The economic climate may be affecting much of the manufacturing industry, but one thing is assured and that is the bond between mother and child. Childcare is likely to remain a priority meaning millions of parents will continue to purchase AN products despite financial factors.
In March Aspen released its results for the six months ended 31 December 2013 and commented: “The Consumer division is expected to continue its recovery despite the difficult economic environment and the recently completed infant nutritional transaction with Nestlé will provide added impetus.”