Open Country Dairy is to make a decision by the end of this year on how best to cope with burgeoning Waikato milk supply, and says its options include building a new UHT plant at Horotiu.
Other options would be to expand its Waharoa plant, near Matamata, or stretch its Wanganui processing capacity, said chairman Laurie Margrain.
The company, New Zealand’s second biggest milk processor after Fonterra, is 54 per cent owned by South Island food group, Talleys, which owns Affco meat group. Affco has processing plants at Horotiu and Moerewa in the Bay of Islands.
Margrain said the Moerewa site was also in the mix of options. However, north Waikato and south Auckland were focus points for meeting supplier demand for more capacity. Open Country has a resource consent for a processing plant at Horotiu.
Margrain said directors were likely to make a decision in December and no later than January.
He said the company’s North Island supply books were closed with all existing supply committed.
But Open Country had made a commitment to its suppliers to take their supply if they increased production.
The company exports ingredients for dairy products, but if it went down the UHT (ultra-high temperature) road, it would be making finished product, he said.
Open Country has processing plants in Awarua in Southland, Wanganui and Waikato. It has more than 500 suppliers and processes 900 million litres of milk a year. It makes milk powders, cheese, milk proteins, and milk fats.
In the meantime, Fonterra’s new $126 million UHT milk plant at Waitoa is just four months off completion with the first long-life milk products due to start rolling out in March.
Some operational staff among the 90 new recruits for the plant have started work and further recruiting is under way, a spokesman said.
The new processing site, alongside Fonterra’s existing plant at Waitoa, will have five UHT lines producing a range of goods including UHT white milk and cream for the food service sector, a business that generates more than $1 billion in sales for Fonterra a year. Most of the new production will be exported to China and Asia.
Source: Stuff