New Zealand Milk Company to build milk powder plant

New Zealand Milk Company (NZMC) plans to build a NZ$100 million milk powder plant by mid-2010, and is currently seeking approvals for a plant north of the Waitaki river.

 

NZMC is in negotiations with farmer supplies to enable a plant to be built midway between Glenavy and a rival New Zealand Dairies plant at Studholme near Waimate.

 

NZMC sees growth potential in the region, with up to 40,000 acres of irrigated land available, according to director Tim Howe.

 

Howe said if half of that area goes to dairy, there would be a significant need for additional production facilities in that area.

 

Farmers in the area had relatively large herds and about 50,000 head of cattle were required for the plant, which could contain a drier to process eight tonnes per hour. A larger 12-tonne per hour unit was also considered for the export powder.

 

There is strong demand from the Southeast Asian region, especially Japan after changes were made to its internal trade quota, Howe said.

 

The plant would be funded by a 50/50 mix of equity and debt with farmers asked to put up in the order of NZ$40-50 million. Commitment from farmers was essential before building started.

 

Howe said the board hoped to have the plant open for the 2011-12 season.

 

The facility is expected to provide about 160 fulltime jobs.

 

US$1 = NZ$1.74 (Apr 17, 2009)