Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Exporter Targets Specialist Ingredients Market

14 April 2005

New Dairy Exporter Targets Specialist Ingredients Market

Synlait Investments Ltd, one of the country’s largest dairy farming operations, is to become an independent cow-to-customer dairy exporter from the 2007/8 dairy season, its Board of Directors announced today.

Synlait Chairman Dr John Penno, along with directors Ben Dingle, Juliet Maclean and Hon. Ruth Richardson, advised Synlait’s current milk processor, Fonterra Co-operative Group Ltd, and the Minister of Agriculture, Hon. Jim Sutton, of the company’s plans this morning.

Smaller, independent dairy exporters such as Synlait were envisaged by the Government’s Dairy Industry Restructuring Act 2001 which established Fonterra as the dominant player in the industry.

Dr Penno said Synlait, which currently produces more than 40 million litres of milk a year from 8,500 cows on 2,800 hectares of prime Canterbury land, now had the critical mass to begin the next stage of its development which would see it become New Zealand’s first genuine cow-to-customer dairy export company, focussed on exporting ingredients to the world’s leading food manufacturers, particularly in the functional foods category, with which it had already established key relationships.

Dr Penno said the plans would be funded with existing resources and by sourcing equity from selected outside investors.

“From our base, we plan to expand milk production to 100 million litres a year, or approximately one percent of New Zealand’s total milk production, and to build a state-of-the-art processing facility central to our farming operations. At least 100 new jobs are expected to be created as these plans unfold, mainly in mid-Canterbury but also in offshore marketing.”

Dr Penno said Synlait aspired to have the country’s best on-farm management expertise to give it a significant cost advantage over other farming operations. It would deliver similar cost advantages right through the value chain, through milk collection and transportation, manufacturing, marketing and logistics. For example, forecast milk transportation costs were 5c per kg/ms compared with a New Zealand industry average of 20c per kg/ms.

But Dr Penno said the company’s plans were driven by the international marketing gains that its unique cow-to-customer model would deliver rather than cost savings alone.

“By controlling every element of the value chain, Synlait will be able to breed and manage our herds to produce the milk characteristics sought by individual customers. We will use that milk to deliver the specialist ingredients demanded by those individual customers to add value to their products.”

As a smaller player than the industry giants, Synlait would also be able to deliver smaller specialist runs for specific customer purposes than the global industry giants, Dr Penno said.

“Just as significantly, our unique cow-to-customer model means we will be able to trace and certify the source of our products back through the production and supply process for customers that request that facility. We are unaware of any dairy company in the world that will be able to deliver such sophisticated traceability systems as we have planned,” he said.

Dr Penno said that sourcing equity from selected outside investors would also be a major step for a New Zealand dairy exporter. He said the raising of capital may or may not be by an offer of securities to the public. He emphasised that no money was currently being sought for Synlait’s processing and marketing arm and no applications for securities would be accepted or money received unless the subscriber has received an investment statement, assuming an offer to the public is subsequently made.


© Scoop Media

Business Headlines | Sci-Tech Headlines


I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>


Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>


Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>


Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news