THL Collaborates with Jetton to Establish a Dairy Product Factory
American Dairy Protein Supply (ADPS) is a joint venture between THL and Jetton Biochemistry Co Ltd. This dairy product factory is the first overseas venture by THL and has been established in the USA. THL, already a well known provider of fast-moving consumer products, is now focusing on the production end. THL not only shortens the supply chain but is now producing custom made products according to the needs of the channels.
ADPS is the first Hsin Lin overseas production base. Although it is not the first time THL has engaged in production, it is the first time it has played such a diverse role, from the establishment of a factory, to production, packing, and marketing.
In the planning stage, Rover Lin, General Manager of Jetton Biochemistry Co Ltd said that “at the recommendation of AIT, 17 states that actively engaged in dairy product production were visited. We found eight locations in five states that deserved consideration, and finally chose Idaho”
Idaho was chosen because of three major advantages: quality products, reasonable cost of human resources, and help from the state government. To start with, cows are very important and a lot of them were needed for the production of dairy products. Therefore, it was important to have many dairy herds of high quality, and the cost of milk should be reasonable. A location in the second largest city in Idaho was chosen for the factory. It has a large population, and adequate human resources are available.
However, the most important point was that the US state authorities gave great support to this investment project. Rover pointed out that preparation for the establishment of the factory had taken about three years. During this time he had visited Idaho eight times, and Butch Otter, the former governor of Idaho, had participated in the meetings in person. The director of the Agricultural Department was involved in this project. He helped ADPS to find a suitable site, as well as with the development lease and final purchase of the land. He also helped us with export policies – “when the products leave the factory, it means they have also cleared customs.”
Rover explained that not every state in the US neighbors the sea. To clear customs, the process of transportation through states can be lengthy and complicated. The Idaho government granted us preferential measures that ensured that “when the products leave the factory, they have also cleared customs.” This reduces the time and cost for to ADPS for the export of products. It seems that “we have a wharf and an airport right in front of our door.” The time for shipping is greatly reduced, which enhances control of the process.
ADPS (US) is a joint venture between THL and Jetton. TICO Biotech, a subsidiary company of THL, will be responsible for the research, development, sales, channels, and the products. Denise Yen, Business Development Director of TICO said that ADPS production line development will take place in three stages. Stage one will be milk powder; stage two will be evaporated milk and extended shelf life milk; stage three will be functional milk (1L and 2L). All three stages are expected to be completed and running within five years.
The Idaho government gave ADPS great support in this investment project. It helped us find a suitable site, develop, lease and finally purchase the land. It also granted us preferential treatment for export convenience – “when the products leave the factory, they have cleared customs.” –Rover Lin, General Manager of Jetton Biochemistry Co Ltd.
Before the ADPS (US) joint venture, Hsin Lin and Jetton had been collaborating for years. Mr.Rover's non-dairy creamer and evaporated milk, sold through the THL food and beverage channels, are made by Jetton. Raw materials are imported from the Netherlands, Vietnam, the US, and other countries. They are designed for the specific needs of different markets and demand. The parties have a long and satisfactory relationship.
Talking about the expectations of future cooperation, Rover said that THL is the biggest agency handling fast moving consumer goods in Taiwan. The company is familiar with the needs of manufacturers, the channels, and market response. It also has wide experience in the minimization of cost and maximization of quality. Moreover, many of THL's products are from the US where the group has very solid relationships. For Jetton, this is an important advantage.
While Jetton Biochemistry Co Ltd specializes in the production of milk products and THL specializes in sales of fast moving consumer products, the two can now collaborate to engage in self-production and self-marketing. It shortens the distance between production and consumer. Production and manufacture can be steered towards custom made products according to the needs of different channels, giving incomparable competitiveness.