Multi-Million Dollar Factory For Westland Dairy

New Multi-Million Dollar Factory For Westland Dairy

A bumper season for Westland dairy farmers and the promise of future growth has prompted moves by the Westland Co-Operative Dairy Company to build a new whole milk powder plant.

The company today lodged an application with the Westland District Council for resource consent to build the plant.

The new milk powder plant at the Hokitika processing facility would have a capacity of 6.5 tonnes per hour, allowing Westland Dairy to manage an additional 1.5 million litres of milk per day.

It is estimated that it will cost $55- $60 million to build the new plant.

Westland Dairy recently announced that the price paid for milk is being increased from $3.70 to $4.25/kg. The company is forecasting an end of season payout of $5/kg. That¹s an increase on last year¹s end of season price of $3.77. It comes as a result of a season of record growth, high export prices and a favourable exchange rate.

"The current plant is fast reaching its capacity which is why Westland Dairy has been investigating and assessing the potential benefits of a new plant," says CEO Terry Norwood.

"Dairy farmers in the West Coast region will produce 28 million kilograms of milk solids this season that will be converted by Westland Dairy into a range of milk powders as well as butter and casein at the Hokitika and Karamea processing sites. Our milk intake for the year is presently 13% ahead of last year."

"Growth in milk in the region has averaged 8.2% a year for the last 15 years (twice the national average) coming from existing on-farm improvements and conversion of new land to dairying. Westland Dairy needs to be able to manage future growth," says Mr Norwood.

"With this development, we could provide the best service for farmers in our region and ensure a healthy mix of milk powder products for our national and international markets."

A new factory would include a new drier, additional boiler and the development of increased storage capacity.

Westland Dairy is also reviewing the impact of the increased production on laboratory, reception and milk treatment resources.

At this stage, Westland Dairy plans to begin work on the new plant in June of this year with completion scheduled for August of 2002.

Westland Dairy is continuing to consider whether to be part of the proposed merger between Kiwi Dairy Co-op and New Zealand Dairy Group or continue as an independent stand-alone company.

"The new plant would have been undertaken regardless of the future structure and ownership of the company," says Terry Norwood.

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