March 13, 2007

 

New Zealand's Affco Holdings to invest in dairy
 

 

New Zealand meat exporter and processor Affco Holdings is entering the dairy industry, creating a subsidiary company which could build up to four dairy factories including one in Southland.

 

Affco announced yesterday it had formed Dairy Trust Ltd to acquire or purchase from Affco sites in Northland, Waikato, Wanganui and Southland to develop, own and manage dairy plants.

 

Affco director Andrew Talley said he hoped to begin a feasibility study this year and to have a plant operating "sooner rather than later".

 

Work has already started creating markets and while the final product mix and scale of operation was still to be finalised, he said milk powder exports would likely be its feature produce since it dominates milk trade.

 

Talley said the dairy sector presented growth opportunities at a time the meat industry was consolidating.

 

Details of how much would be spent on the venture were not disclosed.

 

The Talleys are known for its fish business in Motueka and owns 45.9 percent of Affco.  Last year a joint venture with Affco established a sheep meat processing plant, South Pacific Meats, near Bluff in Southland.

 

Dairy Trust has bought that site which was not owned by Affco.

 

Affco Holdings chairman Sam Lewis said in a statement that Affco's role in Dairy Trust would be as an investor only.

 

Lewis said Dairy Trust will operate with its own management and board and will quite quickly have a much wider shareholding base than just Affco.

 

Discussion was already starting with potential investors but Lewis said it was likely Dairy Trust would seek a listing on the New Zealand Stock Exchange in 2008.