New Zealand’s No 2 dairy company, Open Country Dairy, is eyeing processing expansion in Southland and north Waikato.
But chairman Laurie Margrain told NZFarmer at the National Fieldays that even if the company took up several development opportunities in those areas, it could not build enough stainless-steel capacity to satisfy demand from farmers to supply the company.
A low-profile, publicity-shy operator compared with the country’s biggest dairy company, Fonterra, Open Country will not specify where it might next build a plant, but Margrain said one opportunity was for a greenfield development and the other was to expand an existing operation.
Expansion intentions would become clear in the next few months, he said.
The company is in its 10th operating season and has three plants, in Southland, Taranaki and Waikato.
It started nearly a decade ago in Waikato with just two suppliers. It now has 610, but is a minnow compared with farmer-owned co-operative Fonterra, which has 10,500 suppliers.
Margrain said the Southland opportunity had been on the drawing board for some time, and the north Waikato prospects were smaller investments.
He said the company’s three plants were fully supplied, but approaches at the Fieldays this week suggested many more dairy farmers were interested in joining Open Country.
«We have more offers of supply than we could take on today, but you never know if that is real until you build more capacity and see if the supply comes. But at the moment we are full,» he said.
Milk-processing capacity is rapidly expanding in both islands.
Chinese company Yashili plans an infant formula ingredient plant in north Waikato, and another Chinese company, Yilli, is eyeing development in the South Island.
Fonterra is building a $100 million plant to make infant formula in Waitoa, in Waikato.
Canterbury’s Synlait is expanding, and Waikato’s rapidly growing Dairy Goat Co-operative is building a second powder dryer in Hamilton.
Open Country is a private company, majority-owned by New Zealand food group Talley’s.
Source: Stuff