Canada Royal Milk has received regulatory approval from Health Canada and the Canadian Food Inspection Agency to manufacture dairy-based infant formula at its Kingston production facility.
Why it matters: Regulatory approval could provide a new market for domestic milk and a potential use for some of the Ontario dairy sector’s surplus of solids-non-fat milk components.
In a news release, Canada Royal Milk (CRM) said the federal government approvals pave the way for significant growth at the plant. Since its completion in 2019, it has operated far below capacity in manufacturing goat milk powder mostly for export.
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CRM is owned by Chinese infant powder manufacturer Feihe, which in 2021 operated eight manufacturing facilities in its home country. The company, founded in 1954, arose in 2008 as an untainted source of baby formula following a devastating Chinese food safety scandal involving melamine.
At that time, the Kingston plant was its only international property.
“Meeting the infant formula needs of parents has been Canada Royal Milk’s number one priority since breaking ground in 2019,” the company said in its news release.
“Now that the necessary approvals have been obtained, (the company) is committed to supporting the health and nourishment of families across the country.”
The executive director of the Canadian Dairy Commission, the arms-length federal government agency that oversees provision of milk to processors, acknowledged the potentially game-changing nature of the announcement.
“This recent approval for Canada Royal Milk will see infant formula manufactured in Canada from Canadian milk,” said Philippe Charlebois of the commission.
“To our knowledge, there is currently no domestic manufacturing of infant formula in Canada. The CDC does not have information on currently imported products for infant formula in Canada.”
The Dairy Farmers of Ontario (DFO) marketing board said by email that it could not fulfil requests for an interview but acknowledged the organization “is excited to hear of CRM’s product approval and will continue to work with CRM in supplying them with Canadian milk.
“DFO is not able to speculate on the impact to the Ontario dairy industry.”
In 2017, under the former Liberal provincial government, CRM received a $24-million Food and Beverage Growth Fund grant for construction of its approximately $300-million facility. Later, the ruling Conservatives kicked in $1.5 million under the Eastern Ontario Development Fund to help the City of Kingston upgrade infrastructure to the plant.
A 2017 article by China’s official Xinhua news agency stated “some 20 per cent of the plant’s products will stay in North America, with the rest exporting to China.” Given what has unfolded since 2017 in both Canadian and international dairy trade negotiations, that figure is likely no longer accurate.
The same article also noted that CRM “was approved for two (Canadian) federal programs: the milk access for growth program, which allows it to buy milk, and a matching investment fund, which offers non-repayable contributions to companies that innovate.”
No value for those federal government contributions was disclosed. With recent approvals, domestic returns on those government investments may start to flow.
“Next steps to begin production of the first batch of infant formula have been initiated,” the CRM news release stated. “It is anticipated that the product will be available for retail distribution from coast to coast to coast this summer.”
CRM’s media department did not respond to a request for further information.
