$240m milk plant on schedule

The venture, first mooted by local farmers and businessmen nearly 10 years ago, took off in 2016 with the major investment backing of the China Animal Husbandry Group.

Construction of the $240 million factory at McNab began early this year. Commissioning is expected take place through mid next year with the first production in August 2018.

General manager Bernard May says the company aims to be the “world’s best nutritional business,” manufacturing and producing premium infant milk formula mainly for export.

He says the plant will be the first in Australasia to be certified not only to MPI standards but also to USFDA standards. It is also unique in having external auditors monitoring all construction.

Farmer suppliers will need to meet more stringent farm practices including refrigerating milk to lower temperatures to meet its standards and in turn will be paid accordingly, said May.

“The farmer shareholders already on board are embracing the opportunity of superior returns by supplying milk into a fully integrated nutritional business.”

May said continued recruitment of milk supplier/shareholders and staff will be major focuses in the next six months. Farmers have shown keen interest in becoming shareholders and he is confident of having the 25 to 30 needed by December, May said.

“There’s competition for milk, and farmers are looking at where they can get the best return for the milk they sell and that’s why it’s particularly attractive for a farmer to supply MVM.”

China Animal Husbandry Group is one of the largest of China’s state-owned enterprises working in the agriculture sector. Hamilton-based BODCO, itself partly owned by CAHG, also has a small shareholding in Mataura Valley Milk and will handle the canning of some of MVM’s product.

With farmers’ shareholding expected to reach about 20%, CAHG’s holding will be diluted to just under 72%.

The McNab plant is expected to process about 500,000 litres of whole milk a day, producing about 30,000 tonnes of infant formula a year at full capacity, with 80-85% exported. It will have about 65 fulltime employees.

Mataura Valley Milk milk supply manager Dave Yardley said farmers he has met to date are excited about the opportunity and he has a busy schedule of meetings.

“The small size of the business, the connection they will have as shareholders, and the fact we’re going to the higher end of the value-added market are piquing farmer interest.

“Positivity has returned to the dairy sector so people are seeing it as a good time to review where they are, and whether they have a better choice out there,” Yardley said.

May said the plant’s construction is on schedule with the drying tower already at its maximum 40m height.

“We’re confident that right here now, we’re building the world’s best nutritional formula plant,” he said.