December 3, 2013

 

Westland Milk Products has invested NZD100 million (US$82 million) in building an infant formula dryer at Hokitika and will begin investigations into building a plant to make long-lasting milk products at Rolleston.

 

Westland Milk Products' board has approved NZD2 million (US$1.6 million) to take the 3.9 tonnes an hour dryer to the next stage, which should see it through the resource consent process by February.

 

Subject to consents being granted, building of the new dryer is expected to start in April and it will be commissioned in August 2015, while the Rolleston plant for ultra-heat treatment (UHT) products is only at the planning stage.

 

Westland chief executive Rod Quin said the nutritional dryer was the next stage in Westland's growth plan. The company was continuing to develop its capacity as a supplier of high-end nutritional products and relied less on selling bulk ingredients.

 

"Prospects for the dairy industry worldwide, and in New Zealand in particular, are for continued growth with increased demand, especially from China,'' he said.

 

During the 2012-13 season, Westland made good progress in improving use of the plant by growing milk supply and offering year-round supply, Quin said.

 

The farmer-owned co-operative entered new markets with new value-add products.

 

At the annual meeting this week, farmer shareholders supported changes to the co-operative's constitution with directors no longer restricted to ward representation. Director terms will increase from three to four years. New independent director Keith Smith will replace David Spence who served 12 years in the role on the board. Directors' remuneration was increased to bring it closer to industry levels.

 

Westland is making progress on its new NZD23 million (US$19 million) boiler at Hokitika which is ahead of schedule. When completed it will remove the risk of energy supplies being disrupted and provide savings.

 

Westland set a daily milk peak on November 17 when 3.69 million litres was collected from farms.

 

The co-operative is expected to produce and sell 122,000 tonnes of milk products for more than NZD750 million (US$614 million) in revenue in the 2013-14 season. The payout forecast remains at NZD7.60 to NZD8 (US$6.22 to US$6.55) a kilogramme of milk solids before retentions.

 

It will be recalculated in December when more contracts are completed and foreign exchange cover is in place.