What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
The upgrade underway at Fonterra's Edgecumbe site will allow Fonterra to capture lactose that was previously unable to be extracted from the site's waste stream by creatively applying existing filtration technology.
While the project will cost $8 million, it will double the amount of lactose the site is able to recover in a day, reducing Fonterra's reliance on imported lactose from overseas suppliers and delivering significant and ongoing cost savings.
Fonterra Director New Zealand Manufacturing, Mark Leslie says the upgrade will play a vital role in the co-operative's ability to provide high quality milk powder to the world.
"Lactose is used mainly in standardising milk powder, and the additional volumes of lactose we're now able to capture will be essential in supplying the new dryer opening soon in Lichfield – one of our most strategically important builds," Leslie says.
"We are continually looking for ways to get the most out of our milk and this is another good example. We have found a creative way to use existing technology that will bring great results, save us cash and deliver real value for our farmers."
Not only will the upgrade generate savings for the co-operative, by removing even more solids from the site's waste water it will also reduce Fonterra Edgecumbe's environmental footprint.
"Important to Fonterra is our commitment to creating a more sustainable dairy industry. As with any project we undertake, reducing our emissions and our environmental impacts is one of the first considerations," says Leslie.
"This project, and several others planned for the Edgecumbe site in the coming months demonstrate that ongoing commitment."
