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Tuesday, 21 September 2021 08:55

Another new milk plant planned for the Waikato

Written by  Sudesh Kissun
OFI general manager Paul Johnson and operations director Paul Rennie at the company's new plant site at Tokoroa. OFI general manager Paul Johnson and operations director Paul Rennie at the company's new plant site at Tokoroa.

Singapore-based Olam Food Ingredients says its proposed milk plant in South Waikato is the first phase of an ambitious development plan.

The first stage of the greenfield project on an 11ha site in Tokoroa involves construction of a spray dryer facility. Additional facilities will be added over time.

OFI Dairy senior vice president Naval Sabri told Rural News the new plant will initially make wholemilk powders, with a focus on high-spec, customised powders for its global customers.

"Over time we will expand the range of dairy ingredients we make at the site," he says. "Our customers use our products in bakery, confectionary, desserts and beverages so they need high quality ingredients such as powders, creams and yoghurt."

Sabri could not say how much milk would be processed in the first season, scheduled to start after mid-2023.

"It's very early days for us. Our first priority is talking to farmers and listening to what they need, and then shaping our milk supply offer to suit those needs," he told Rural News.

"We don't have an exact number of farmer suppliers in mind, but we are taking a long-term approach to growing milk supply as this is just the first phase of our development plans."

The Singapore-based conglomerate is no stranger to the NZ dairy industry.

Until recently it held a cornerstone stake in NZ's second largest milk processor, Open Country Dairy.

It is also a major buyer of dairy products from Fonterra and other processors.

Sabri says OFI will continue its wider commercial relationships in NZ.

"We see the new plant as complementary to the ingredients we source from other suppliers, and a way for us to deliver more customised solutions to our customers.

"New Zealand dairy is very well regarded on the world stage and we look forward to continuing to support that with our development."

OFI ranks among the top three dairy suppliers in the world.

The Tokoroa plant will become part of a global network that spans 20 major milk consumption markets, such as South-East Asia, China, the Middle East, and Africa.

OFI operations director Paul Rennie says the new factory is expected to create 50 to 60 full time jobs in Tokoroa when fully operational, with more jobs anticipated in future stages of the development.

"We are looking forward to joining the Tokoroa community and sharing our strong focus on operating sustainably," he says. "It will complement the work we will do throughout the supply chain and the work that farmers are doing on their farms."

Milk Price Guarantee

Farmers supplying milk to Olam Food Ingredients' (OFI) proposed Tokoroa plant will enjoy a minimum guaranteed milk price and competitive advance rates.

General manager milk supply Paul Johnson told Rural News the Singaporean-based company has been talking to farmers in the Waikato and Bay of Plenty catchments and to rural professionals.

Johnson, who joined the company from Fonterra in June, says these discussions would shape up their milk supply pricing structure.

"The feedback we are getting is that farmers want confidence and certainty around milk pricing and good cash flow," he claims.

"On our part, we are looking at offering a minimum guaranteed milk price and competitive advance rates and we believe this will give farmers confidence and certainty and help with cash flow."

Johnson says the company's priority is to develop a supply offer that works for farmers on every level. He says OFI is a strong local player, backed by a significant global business.

"We are taking a long-term view with milk supply partnerships. This means taking the time to understand what will make a genuine difference to our milk supply partners and then shaping our offer accordingly."

OFI will be sourcing milk from around Waikato and Bay of Plenty - regions with about 1500 farmer suppliers.

Johnson says the company would only need a small number of farmer suppliers for the first season.

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