Roughly 85 per cent of the powdered formula made in Kingston could be shipped back to China. But that's an awfully long boat ride.
Why come all the way to Canada for milk?
It's all about reputation.
Donald Trump called Canada's supply-managed dairy sector a "disgrace."
Indeed, Canada's strict system of production quotas, import restrictions and price and quality controls is a perennial target for free traders.
But guess who likes it? The biggest market Canada is wooing right now: China.
Supply management is a big reason why a Chinese corporation is investing an unprecedented $225 million in eastern Ontario. Feihe International, Inc. wants cows. Goats, too. Lots of them.
That's because as China's one-child policy phases out, it's going to need a lot of baby formula.
"It's one of the largest economic development projects in our city's history," said Kingston, Ont., mayor Bryan Paterson, calling Canada's largest-ever foreign investment in agri-food "off the charts."
"It might be out of the ordinary, but I think that's what was most exciting."
The first concrete trucks are already pouring at the future site of a 28,000-square-metre infant formula plant. When the state-of-the-art facility opens in 2019, it will employ over 200 people in manufacturing and research jobs. Over a thousand more could come from its construction and eventual supply chains.
Last winter, Feihe brought the mayor and a delegation from Kingston over to northeastern China for a tour of its factories and farms. Paterson was struck by how geographically similar it was to eastern Ontario.
With one big difference: scale.
A "typical rural village" they visited was three times the size of Kingston, he said.
"When you have millions and millions of babies, you need to be able to manufacture a lot of infant baby formula."
Canada hasn't made its own baby formula for years. The Canadian Dairy Commission tried for a couple of years to find a domestic processor. Demand for butter was up, and baby formula uses the non-butterfat part of milk. But no Canadian processors were interested in expanding into formula.
The CDC broadened its search internationally, to European and Asian companies.
In Feihe, the CDC found its fit: a manufacturer with over 50 years of experience and keen to expand to North America.
Promotional materials describe Feihe as the top domestic manufacturer of cow's milk formula in China in 2016, with brands in over 100,000 retail outlets across that country — mostly in medium-sized cities where urbanization is expanding and the number of middle-class consumers is rising fast.
Business proposals obtained by CBC News under the Access to Information Act anticipate strong growth for China's formula market. Only one in four Chinese mothers breastfeed exclusively for their baby's first six months. The gradual phase-out of China's one-child policy is poised to spark a baby boom.
In 2008, Chinese dairy products such as baby formula were discovered tainted with melamine. Hundreds of thousands became sick, and at least six children died. Since then, many Chinese distrust domestic milk and prefer foreign brands.
The world's top dairy producers have eyed China for years. But New Zealand's dominant dairy cooperative was a minority shareholder in Sanlu, the company at the heart of the melamine scandal.
Sagging global prices for milk are now forcing farms around the world out of business. Not so in Canada.
"I know that might sound silly for some people, but this is a good side of supply management," said Canadian Dairy Commission spokesperson Chantal Paul. "[The Chinese] know that they're going to have their supply."
video
A winning formula? China invests in Canadian dairy to help feed its baby boom - Politics - CBC News
Why come all the way to Canada for milk?
It's all about reputation.
Donald Trump called Canada's supply-managed dairy sector a "disgrace."
Indeed, Canada's strict system of production quotas, import restrictions and price and quality controls is a perennial target for free traders.
But guess who likes it? The biggest market Canada is wooing right now: China.
Supply management is a big reason why a Chinese corporation is investing an unprecedented $225 million in eastern Ontario. Feihe International, Inc. wants cows. Goats, too. Lots of them.
That's because as China's one-child policy phases out, it's going to need a lot of baby formula.
"It's one of the largest economic development projects in our city's history," said Kingston, Ont., mayor Bryan Paterson, calling Canada's largest-ever foreign investment in agri-food "off the charts."
"It might be out of the ordinary, but I think that's what was most exciting."
The first concrete trucks are already pouring at the future site of a 28,000-square-metre infant formula plant. When the state-of-the-art facility opens in 2019, it will employ over 200 people in manufacturing and research jobs. Over a thousand more could come from its construction and eventual supply chains.
Last winter, Feihe brought the mayor and a delegation from Kingston over to northeastern China for a tour of its factories and farms. Paterson was struck by how geographically similar it was to eastern Ontario.
With one big difference: scale.
A "typical rural village" they visited was three times the size of Kingston, he said.
"When you have millions and millions of babies, you need to be able to manufacture a lot of infant baby formula."
Canada hasn't made its own baby formula for years. The Canadian Dairy Commission tried for a couple of years to find a domestic processor. Demand for butter was up, and baby formula uses the non-butterfat part of milk. But no Canadian processors were interested in expanding into formula.
The CDC broadened its search internationally, to European and Asian companies.
In Feihe, the CDC found its fit: a manufacturer with over 50 years of experience and keen to expand to North America.
Promotional materials describe Feihe as the top domestic manufacturer of cow's milk formula in China in 2016, with brands in over 100,000 retail outlets across that country — mostly in medium-sized cities where urbanization is expanding and the number of middle-class consumers is rising fast.
Business proposals obtained by CBC News under the Access to Information Act anticipate strong growth for China's formula market. Only one in four Chinese mothers breastfeed exclusively for their baby's first six months. The gradual phase-out of China's one-child policy is poised to spark a baby boom.
In 2008, Chinese dairy products such as baby formula were discovered tainted with melamine. Hundreds of thousands became sick, and at least six children died. Since then, many Chinese distrust domestic milk and prefer foreign brands.
The world's top dairy producers have eyed China for years. But New Zealand's dominant dairy cooperative was a minority shareholder in Sanlu, the company at the heart of the melamine scandal.
Sagging global prices for milk are now forcing farms around the world out of business. Not so in Canada.
"I know that might sound silly for some people, but this is a good side of supply management," said Canadian Dairy Commission spokesperson Chantal Paul. "[The Chinese] know that they're going to have their supply."
video
A winning formula? China invests in Canadian dairy to help feed its baby boom - Politics - CBC News
