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.
After years of hard work, and a huge team effort across Fonterra, the super-secret plant has cut the mozzarella cheese making process from three months to six hours.
Each day the plant makes enough mozzarella for around 825,000 pizzas -- annually that's 300 million pizzas!
The plant was officially opened by the Minister for Science and Innovation Steven Joyce and Minister for Food Safety Jo Goodhew in a function attended by 200 staff, farmers, scientists and dignitaries.
To protect the intellectual property behind the unique process the opening was held across the road from the plant at the former Clandeboye Primary School.
Marketed as the biggest secret since the 11 herbs and spices, the production process is jealously guarded by Fonterra. Access to the plant is severely restricted, so much so that some co-op senior managers are not allowed inside.
Managing director global operations Robert Spurway says the innovation behind the groundbreaking time reduction is part of Fonterra's strategy to add value to every drop of milk and therefore to shareholders.
Spurway says this type of innovation is crucial to Fonterra's success and they are spending $80 million per annum on R&D.
The mozzarella plant was a demand-driven investment, and they succeeded in developing an innovative natural process that has mozzarella ready for export in six hours, which they can adjust to individual customers demands.
Joyce brought a smile to faces when he described his recent run-in with a sex toy at Waitangi Day as "doing his best to market New Zealand globally", but said "he still needed to work on his brand message".
On a more serious note, Joyce said dairying had been in the spotlight for all the wrong reasons; the long-term story is positive for dairying and NZ food has excellent prospects worldwide.
The mozzarella plant came from one of the Government's primary growth partnerships (PGP) which are designed to increase productivity in the primary sector. Mozzarella is a big part of the Fonterra story and will allow the co-op to uncouple from the commodity market, always in ebb and flow.
In highlighting the importance of Clandeboye to the co-op, Fonterra director Leonie Guiney said dairying is worth $3 billion to Canterbury and 18% of NZ cows are milked at Clandeboye.
