By Deborah Hill Cone
Friday 18th July 2003
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He has been a director and shareholder of the company since its inception and was a friend of founder Howard Paterson "from the sandpit."
Dunedin-born, London-based Dr Burt said he was committed to help take A2 to its next phase of development following the tragic death of Mr Paterson and illness of A2's longtime chief executive Corrie McLachlan, who has stepped down while he has treatment for cancer.
Dr Burt is a former head of equity markets for Macquarie Bank and Deutsche Bank in Australia and since 1994 has run his own private equity company Lotus Capital in London.
Although he was involved with seven different companies in New Zealand, "A2 is the one where I am going to put my focus," Dr Burt told The National Business Review.
A2 milk is now available to consumers in New Zealand and Australia and the next phase will focus on signing licensing agreements with companies in international markets.
Although it was necessary to set up a platform in New Zealand the local market was not where the potential growth for A2 would come from, Dr Burt said.
New Zealand has about three million cows, compared with nine million in the US and 18 million in Europe. There are 14 billion litres of milk produced in New Zealand per year, the same as in the UK, but only 2.5% is consumed here, compared with 70% of UK milk production which is consumed in that country.
Dr Burt said the real growth for A2 would occur from UHT milk and milk powders and research had shown the claimed health benefits of A2 were not lost by processing.
A2 was far advanced in talking to "first-class international partners," in the nutriceuticals and food processing sector. The deal would essentially be a tolling operation, in which offshore partners would pay royalties for the right to use A2's technology.
A2 trades on the unlisted market and its shares have dropped in value in the past month in response to news of Mr Paterson's death and Dr McLachlan's illness.
The shares were trading at 14c in June and dropped to 6.5c but were trading at 9c at press time.
Dr Burt said raising funds was not a problem for the company as its key shareholders were committed to it and "had deep pockets."
A2 was pushing ahead with the court case it initiated against milk giant Fonterra and had no intention of dropping the suit, Dr Burt said.
"We continue to believe that A1 has attributes the public could be and should be warned about and we will present evidence from eminent scientific people who support our view."
Fonterra has made an application to have the proceedings struck out.
The research side of the organisation was also continuing with a new Australian study about the effects of A1 milk being published this month in the journal Arteriosclerosis.
"Informed consumers are likely to choose A2 milk whether you have established the link [with health benefits] or not. Just make the product available in the meantime."
The current acting chief executive at A2 is Andrew Clark, a biochemist and molecular biologist who has been working as a consulting scientist to A2 for the past two years.
A2 Corporation is a research and marketing company which owns patents for a type of milk with A2 beta casein or milk protein, which research has linked with a lower risk of type 1 diabetes and heart disease.
Most milk contains A1 beta casein which one school of thought believes is less healthy and has also been connected in some studies to autism.
Dr Burt said he wanted to carry on Mr Paterson's work.
"Howard set the sails of the ship and had the vision and the courage ... A lot of people saw obstacles but we saw an opportunity," Dr Burt said.
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