The signing took place in Shanghai in front of Ministers Steven Joyce and Pita Sharples, and a group of New Zealand business people, including representatives from Fonterra.
Miraka chairman Kingi Smiler signed the deal, for his company to take milk from four of the former Crafar farms – and up to eight local suppliers. This will be turned in to high-value 1L UHT milk packs for export and distribution in China by Shanghai Pengxin.
Smiler says Miraka will spend $25 million to build the new UHT plant adjacent to its existing milk powder factory, which now exports most of its product to Vietnam in another joint venture with the largest dairy company in that country – Vinamilk.
“The new factory will take 80 million litres a year and we hope to be delivering some of the new UHT milk to China within about 10 months. The UHT milk will be for the growing liquid milk trade in China. All the packaging will be done by us at our factory.”
Because of the lack of refrigeration, UHT milk is the recognised substitute for fresh milk. Fonterra also sells UHT milk in China, but the fact that Shanghai Pengxin has gone with Miraka is seen as a coup for the fledging, successful company.
Smiler says the deal took about a year to complete and reflects the synergy between Miraka and Shanghai Pengxin.
“This is very positive for Miraka and the trusts that form Miraka. This is part of our growth strategy of adding more value to milk and it’s pleasing from our point of view to achieve that in the first couple of years of start-up.”
Smiler says as well as signing the deal in China, they have been talking to customers and potential customers in Vietnam, China and Singapore and won’t rule out the possibility of more deals.
