Happy Valley Nutrition (HVN) says it has been unable to secure funding for the new plant as a result of disruption caused by the pandemic.
The company had hoped to commission the new plant at Otorohanga in 2023.
In a filing with the Australian Stock Exchange two weeks ago, HVN says it is continuing discussions with a range of parties to secure the debt and equity funding required to commence the main construction programme.
"Given the current Covid-19 related business disruptions, the company believes it is unlikely to secure the necessary equity financing within the timeframe as planned.
"As a result, the company has decided to delay the commencement of the facility construction until sufficient capital has been raised."
A 6ha site is being prepared for the new plant that will produce high value specialty dairy ingredient powders for export markets.
The project has been in the pipeline for several years as HVN sought resource consents and funding. Covid has also affected earthworks at the site. The Otorohanga region has been under Level 3 lockdown and earthworks have been temporarily suspended.
The company hopes earthworks will be completed in the coming months.
HVN plans to develop a single dryer facility with the site master-planned to allow for the addition of an extra drier as well as a blending and canning plant.
The company recently signed a third conditional supply agreement with a respected European multi-national distributor of dairy products for the supply of nutritional milk powders and anhydrous milk fat (AMF). As a result, 34% of the spray drying plant's production total capacity and 50% of AMF production capacity has now been committed, it says.
HVN chief executive Greg Wood says its strategy of offering manufacturing capability that caters for a range of milk and ingredient types to align with customer formulation needs, at a cost-effective price point, is resonating with a range of potential customers.
"We are able to offer this product-mix capability through innovative design and modelling of the plant, which is not typically available on existing infrastructure."
